Gold Price Forecast: XAU/USD retreats to $1,800 as yields lick Fed-led wounds, central banks in focus

• Gold price remains pressured at intraday low after recently welcoming sellers.
• Bearish RSI divergence, candlestick formation joins US Dollar rebound to weigh on XAU/USD price.
• US data, monetary policy meetings of BOE, SNB and ECB will be crucial for fresh impulse.

Gold price (XAU/USD) remains on the back foot at around $1,800 as the US Dollar manages to rebound from a six-month low amid traders’ reassessment of the Federal Reserve (Fed) announcements during early Thursday. Also likely to have favored the XAU/USD sellers could be the cautious mood ahead of crucial central bank announcements.

Fed delivered the 50 bps rate hike, as expected, and upwardly revised the dot-plot to suggest 5.1% as the terminal rate versus 4.6% shown in September’s Statement of Economic Projections (SEP). The US central bank also revised the inflation forecasts towards the north but the growth estimations were cut down for 2023 and 2024. Further, Fed Chairman Jerome Powell defended his hawkish image while noting that the ultimate level of rates is more important than how fast they go. The policymaker also added that the Federal Open Market Committee (FOMC) needs to hold rates at their peak until policymakers are "really confident" that inflation comes down in a sustained way.

Following the Fed announcements, the US equities closed on the negative side but the US Treasury bond yields were down too. That said, the US 10-year Treasury bond yields probe a two-day downtrend near 3.50% while the two-year counterpart also extends recovery from the monthly low while printing the first daily positive near 4.25% in three.

As a result, the US Dollar Index (DXY) pares recent losses around 103.75 while bouncing off one-month-old support, as well as the six-month low.

Moving on, Gold traders should pay attention to the multiple central bank announcements, starting from the Swiss National Bank (SNB), European Central Bank (ECB) and the Bank of England (BOE), for clear directions. Among them, the ECB will gain major attention amid hawkish expectations and inverse relations with the US Dollar. Hence, the central bankers’ upbeat outcomes may weigh on the Gold price moving forward.

Gold price technical analysis

Gold price stays depressed while justifying the previous day’s hanging man candlestick, as well as the bearish RSI (14) divergence. That said, the higher high in prices failed to gain company from the RSI (14) and hence signal the pullback in the XAU/USD, which in turn joins the bearish candlestick formation, to please the seller.

With this, the Gold bears are likely approaching a three-week-old support line near $1,789, a break of which could quickly drag the yellow metal to the 200-day Exponential Moving Average (EMA) level surrounding $1,762. However, a convergence of the 50-day and 100-day EMAs, near $1,742-40, could challenge the metal’s further downside.

Meanwhile, recovery moves need to defy Wednesday’s bearish candlestick formation by crossing the $1,815 immediate hurdle.

Following that, the latest peak surrounding $1,825 could challenge the Gold buyers targeting June’s peak of around $1,880.

Gold price: Daily chart

Trend: Further downside expected