Gold Price Forecast: XAUUSD hangs near YTD low, below $1,770 ahead of FOMC minutes

• Gold Price struggled to capitalize on its modest intraday bounce from the YTD low.
• The USD consolidated near a 20-year high and offered some support to the XAUUSD.
• The risk-on impulse, aggressive Fed rate hike bets capped the upside for the metal.

Gold Price staged a modest recovery from the $1,763 area, or a fresh YTD low touched earlier this Wednesday, though struggled to capitalize on the move. The XAUUSD surrendered its modest intraday gains and was last seen trading around the $1,766-$1,767 region, or nearly unchanged for the day.

Following the recent strong bullish run to a fresh two-decade high touched on Tuesday, the US dollar witnessed modest profit-taking amid some repositioning trade ahead of the FOMC meeting minutes. This, in turn, was seen as a key factor that offered some support to the dollar-denominated gold, though the uptick lacked bullish conviction and runs the risk of fizzling out rather quickly.

Fed Chair Jerome Powell reiterated last week that the US central bank is focused on getting inflation under control and added that the US economy is well-positioned to handle tighter policy. This lifted bets for more aggressive rate hikes by the Fed, which should act as a tailwind for the USD. Apart from this, the risk-on impulse kept a lid on any meaningful gains for the safe-haven gold.

Investors might also refrain from placing aggressive bets and prefer to wait for fresh clues about the Fed's policy tightening path. Hence, the FOMC minutes should provide some impetus to the non-yielding yellow metal. Apart from this, the US NPF report on Friday will influence the near-term USD price dynamics and help determine the next leg of a directional move for gold price.

Technical levels to watch