Gold Price Forecast: XAU/USD struggles below $1,900 as Federal Reserve Chairman Jerome Powell’s speech looms

• Gold price fades week-start rebound from one-month low amid sluggish markets ahead of key data, events.
• United States policymakers tame recession woes, bolster hawkish bias over the Federal Reserve.
• Hawkish Fed bets underpin United States Treasury bond yields and US Dollar, as well as weigh on Gold price.
• Fed Chair Jerome Powell needs to praise recent firmer US statistics to please XAU/USD bears.

Gold price (XAU/USD) treads water around $1,865, following a corrective bounce off the one-month low, as the bullion traders await Federal Reserve (Fed) Chairman Jerome Powell’s speech amid hawkish bias over the United States central bank’s next move. It’s worth noting that the optimism among the US policymakers also weighs on the precious metal prices ahead of the key event.

Easing United States recession woes tease Gold sellers

After witnessing strong United States employment and activity data on Friday, policymakers from the US appear optimistic about the economic transition. The same joins the recent hawkish bias over the Federal Reserve’s (Fed) next move, as well as the technical confirmation, to keep the Gold sellers hopeful.

On Monday, US Treasury Secretary Janet Yellen and President Joe Biden pushed back recession woes by praising the latest statistics. Additionally supporting the hawkish Fed concerns were comments from Federal Reserve Bank of Atlanta President Raphel Bostic. “The strong labor market probably means ‘we have to do a little more work,’” said Fed’s Bostic in an interview with Bloomberg.

US-China tension probes XAU/USD price

While the hawkish Fed bets and the hopes of US growth favor Gold sellers, the receding fears of the US-China tussles seem to put a floor under the metal prices. A dash on the US diplomatic visit to Beijing and China’s harsh reaction to the US shooting down its balloon by terming it a spying attempt triggered the market’s risk-off mood and challenged the Gold buyers the previous day. However, the latest comments from US President Joe Bide appear soothing on the matter as he said, “The balloon incident does not weaken US-China relations.”

US Treasury bond yields favor US Dollar bulls, probe Gold bulls

Given the hawkish Fed bias and the receding recession woes in the United States, the US Treasury bond yields extend Friday’s rebound from the multi-day low, which in turn underpins the US Dollar run-up and weighs on the Gold price. That said, the benchmark US 10-year Treasury bond yields grind higher around 3.63%, after a two-day rebound from the monthly low.

Federal Reserve Chairman Jerome Powell eyed

Given the scheduled speech from Federal Reserve (Fed) Chairman Jerome Powell, the Gold price is likely to remain sluggish ahead of the key event. That said, Fed Chair Jerome Powell could choose to praise the latest improvement in the US data and hawkish Fed bets to exert downside pressure on the XAU/USD. It should be noted that US President Joe Biden’s State of the Union (SOTU) comments will also be observed for short-term directions.

Gold price technical analysis

Gold’s week-start corrective bounce off the one-month low failed to cross the previous support line from late November 2022, now resistance around $1,885, which in turn keeps the XAU/USD bears hopeful.

Adding strength to the downside bias could be the bias signals from the Moving Average Convergence and Divergence (MACD) indicator, as well as the steady Relative Strength Index (RSI) line placed at 14.

With this, the Gold price remains on the way to the 50-DMA support of $1,851. However, a horizontal area comprising multiple levels marked since early August 2022, close to $1,805, will precede the $1,800 threshold to challenge the quote’s further downside.

On the flip side, a daily closing beyond the support-turned-resistance near $1,885 will need validation from the $1,900 threshold to recall the Gold buyers.

Following that, the latest peak and highs marked during March 2022, respectively near $1,960 and $1,966, could lure the XAU/USD bulls.

Gold price: Daily chart

Trend: Further downside expected