Gold Price Forecast: XAU/USD hovers around $1,835 post-Fed, inverse H&S in focus

• Gold buyers take a breather after the biggest run in a month.
• Pullback in USD, Treasury yields allowed gold to post a stellar run-up.
• Bullish chart pattern, risk-on mood keep XAU/USD buyers hopeful.

Gold Price (XAU/USD) remains sidelined at around $1,835 as bulls pause for a break after the Fed-inspired rally, the biggest in four weeks. Even so, downbeat US Treasury yields and a bullish chart pattern keeps the metal buyers hopeful.

That said, the US 10-year Treasury yields extend the post-Fed losses, down seven basis points (bps) to 3.33% by the press time, which in turn weighed on the US dollar and enables the XAU/USD bulls to remain positive. However, a lack of major data/events seems to have probed the metal’s immediate upside. While portraying the mood, the S&P 500 Futures track Wall Street’s gains with 0.82% intraday run-up at the latest.

On Wednesday, the US Federal Reserve (Fed) announced the biggest interest rate hike since 1994 to battle inflation fears. The US central bank also revised up inflation forecasts for this year and the next while cutting down the inflation expectations. Further, the policymakers also signaled either a 50 bp or 75 bp rate hike in the next meeting. However, the Fed’s rejection of the odds of a 100 bp rate increase and Chairman Jerome Powell’s measured comments seem to have drowned the Treasury yields and the US dollar afterward.

It’s worth noting that the US data also probed the US dollar bulls ahead of the Fed. US Retail Sales marked a contraction of 0.3% MoM versus an anticipated growth of 0.2% and downwardly revised 0.7% previous readings. Also, the NY Empire State Manufacturing Index dropped to -1.2 compared to 3.0 market consensus and -11.6 prior.

Moving on, risk catalysts will entertain the XAU/USD as the upside momentum seeks validation.

Technical analysis

Gold prices managed to keep the post-Fed gains towards the neckline of the weekly inverse Head-and-Shoulders (H&S) bullish chart pattern, backed by the upbeat MACD signals.

It should be noted, however, that the 200-HMA level of $1,843 needs to validate the XAU/USD advances even if it manages to confirm the inverse H&S, by crossing the neckline figure of $1,838.

Following that, a run-up towards the monthly high near $1,880 can’t be ruled out.

Alternatively, pullback moves remain elusive beyond $1,819 immediate support, a break of which could recall gold sellers targeting the $1,800 threshold.

Gold: Hourly chart

Trend: Further upside expected