Gold Price Forecast: XAU/USD grinds near $1,820 hurdle with eyes on Fed

• Gold price seesaws around multi-day high after retreating from the key resistance.
• US Dollar plunged after inflation data as softer CPI figures cut hawkish Fed bets.
• Cautious mood ahead of FOMC, concerns surrounding China test XAU/USD bulls.
• US Federal Reserve is set for 50 bps rate hike but the future guidance will be key for Gold traders.

Gold price (XAU/USD) buyers struggle to defend the biggest daily jump in a fortnight as the metal seesaws around $1,810, following a retreat from the highest levels since late-June.

Slower-than-expected growth in the US inflation, actually the slowest in over a year, allowed Gold buyers to return to the desk and refresh multi-day high near $1,825. That said, the market’s anxiety ahead of today’s Federal Open Market Committee (FOMC) and a bit pale headlines from China seemed to have tested the XAU/USD bulls of late.

US Consumer Price Index (CPI) dropped to 7.1% YoY in November versus 7.3% expected and 7.7% prior. Further, the CPI ex Food & Energy, known as the Core CPI, also declined to 6.0% YoY during the stated month compared to 6.1% market forecasts and 6.3% previous readings. “Traders of futures tied to the Federal Reserve’s policy rate boosted bets Tuesday that the U.S. central bank will notch down its interest-rate hike pace further early next year, after a government report showed inflation eased sharply in November,” said Reuters. The same drowned the US Dollar Index (DXY) to a six-month low of 103.61 and propelled the Gold price.

On the other hand, the International Monetary Fund (IMF) Managing Director Kristalina Georgieva was spotted expecting a slower economic growth for China due to the latest jump in the daily Covid cases. Additionally, Bloomberg came out with the news suggesting that the Chinese leaders delayed the economic policy meeting due to the COVID-19 problems.

Above all, cautious mood ahead of today’s Fed, especially after Tuesday’s downbeat US inflation data, keeps the Gold traders on the edge.

Even so, Wall Street closed positive and the US 10-year Treasury yields slumped nearly 11 basis points (bps) to 3.50% by the end of Tuesday’s North American session.

Moving on, Gold traders may witness sidelined moves ahead of FOMC. Given the dovish expectations, with 50 bps rate hike on the card, surprise hawkish signals will be enough to recall the XAU/USD bears.

Gold price technical analysis

Gold price flirts with a six-month-old horizontal resistance surrounding $1,810 after faking the rising wedge confirmation the previous day. That said, the yellow metal also reversed from the stated one-month-old wedge’s upper line while consolidating the biggest daily gains in a fortnight.

Given the nearly overbought RSI and sluggish MACD signals, not to forget the XAU/USD pullback from the wedge’s top-line, currently around $1,820, the yellow metal may witness further grinding.

That said, a convergence of the 10-DMA and the wedge’s lower line offers strong downside support near $1,790, a break of which could quickly drag the quote towards September’s high near $1,735.

Alternatively, an upside clearance of the $1,820 hurdle won’t hesitate to propel the metal prices towards June’s peak surrounding $1,880.

Gold price: Daily chart

Trend: Limited upside expected