Gold Price Forecast: XAUUSD hopes for a rebound after a correction from $1,740 ahead of Fed policy

• Gold price is likely to display a firmer rebound s correction seems over.
• Higher jobless benefits and lower expectations for job additions may turn into a laborious job for the Fed.
• Big tech boys in the US may lay off some employees this year.

Gold price (XAUUSD) is likely to rebound after a steep correction to near $1,714.76 as oscillators have turned extremely oversold on a smaller timeframe. The precious metal witnessed a meaningful fall on Monday after failing to overstep the prior week’s high near $1,740.00. The gold prices have turned sideways and are likely to continue the sideways trend as investors are on the sidelines ahead of the interest rate policy by the Federal Reserve (Fed).

Investors should brace for a rate hike by 75 basis points (bps) as Fed chair Jerome Powell is dedicated to bringing price stability. Earlier, market participants were betting on a rate hike by 1% as price pressures have not displayed any sign of exhaustion and have climbed to 9.1% on an annual basis. However, signs of a slowdown in the US economy are not empowering the Fed policymakers to announce a mega rate hike.

The Initial Jobless Claims have reached a seven-month high to 251k as the costly US dollar index (DXY) has resulted in a significant fall in export business for the US and of course lower corporate earnings. After a halt in the recruitment process by tech giant Google; Meta, Spotify, and other big tech boys are favoring employees’ lay-off programs. This may keep the US Nonfarm Payrolls (NFP) data on the tenterhooks ahead. And, will strengthen the gold bulls.

Gold technical analysis

On an hourly scale, gold price has slipped below the 200-period Exponential Moving Average (EMA) at $1,720.43 after establishing above the same. This doesn’t imply a reversal but indicates a corrective move, which will be followed by an impulsive bullish wave.

It is worth noting that the Relative Strength Index (RSI) (14) displayed an establishment in the bullish range of 60.00-80.00 for the first time after a period of eight weeks. This indicates that the short-to-long term trend is bullish and a mild correction will be considered a buying opportunity by the market participants. Also, the RSI (14) is taking support at around 40.00.

Gold hourly chart