Gold Price Forecast: XAU/USD hits a two-week high around $2020s ahead of FOMC’s decision

• Gold recovered its bright after a drop toward its weekly low at $2007.79.
• ADP Employment Change report surprises with huge hiring increase, though failed to underpin the US Dollar.
• ISM’s Non-Manufacturing PMI for April shows hiring moderation and lower input prices.

Gold price advances to two-week highs as the Federal Reserve Open Market Committee (FOMC) decision looms. Estimates are that the Federal Reserve will hike rates by 25 bps, though uncertainty around the Fed Chair Jerome Powell’s press conference keeps investors uneasy. The XAU/USD is trading at $2026.76.

Gold is steady around $2020, ahead of Fed’s decision and Powell’s press conference

Sentiment remains upbeat as Wall Street post gains, ahead of the FOMC’s decision. The latest round of data from the United States was positive, though it gave the Fed the green light to continue tightening monetary conditions.

Firstly, the April ADP Employment Change report showed that private hiring rose by 296K, crushing estimates of 148K, though it did little to weigh on the Gold price, which continues to trend higher. However, on the data release, it dipped toward 2007, though it offered buyers a better entry price to lift prices to fresh two-week highs.

Later, the ISM revealed April’s Non-Manufacturing PMI, which came at 51.9 above the prior’s month data. The report highlights that hiring continued though it moderated, while the price subcomponent remained nearby the lowest levels since 2020.

Ahead of the FOMC’s decision, traders seemed convinced of the Fed’s 25 bps rate hike, as the CME FedWatch Tool shows an 88.2% chance.

Furthermore, the fall of US Treasury bond yields has been another reason for the XAU/USD’s gains throughout the session. The US 10-year Treasury bond yield is dropping 5 bps, yielding 3.386%.

Most analysts speculate that today’s decision could be the latest hike of the current tightening cycle of the Federal Reserve. It should be said that May’s decision would not update Fed officials’ projections regarding the economy’s general health. The June meeting will unveil the Summary of Economic Projections (SEP).

XAU/USD Technical Levels