Gold Price Forecast: XAU/USD remains on the defensive near $1,900 amid the USD demand

• Gold price loses momentum amid the stronger USD.
• US Conference Board (CB) Consumer Confidence for September rose by 103.0 from 108.7 in August.
• The hawkish comments from Fed officials boost the USD and weigh on XAU/USD.
• Market players await the US consumer inflation data due on Friday.

Gold price (XAU/USD) attracts some sellers around $1,902 during the early European session on Wednesday. Precious Metal faces some selling pressure due to a rally of the US Dollar (USD) ahead of the highly-anticipated inflation data on Friday. Meanwhile, the US Dollar Index (DXY), a measure of the value of the USD relative to a basket of foreign currencies, has risen above 106.20, the highest level since November.

Economic data released on Tuesday showed that the US Conference Board (CB) Consumer Confidence for September rose by 103.0 from 108.7 in August. The figures dropped to a four-month low and indicated the impact of higher interest rates and concerns about the political environment. Meanwhile, the Building Permits came in at 1.541M in August from the previous reading of 1.443M. The House Price Index for July rose to 0.8% MoM from 0.4% in the previous reading, above the market consensus of 0.5%. New Home Sales declined -8.7% in August from 8% rise in July.

The Federal Reserve (Fed) decided to hold the interest rate unchanged in the 5.25% to 5.50% range last week. In terms of macroeconomic predictions, most members still expect further rate rises later this year. Minneapolis Federal Reserve Bank President, Neel Kashkari stated on Tuesday that he is one of the Fed policymakers who sees one more rate hike this year. He added that US rates probably have to go a little bit higher and be held there for longer, to cool things off. The hawkish comments from Fed officials boost the US Dollar (USD) across the board. It’s worth noting that rising interest rates raise the opportunity cost of investing in non-yielding assets, implying a negative outlook for XAU/USD.

Gold traders will keep an eye on the US Core Personal Consumption Expenditure (PCE) Price Index, the Fed's preferred measure of consumer inflation on Friday. The annual figure is expected to drop from 4.2% to 3.9%. Traders will take cues from the data and find trading opportunities around gold price.

XAU/USD technical outlook

On the one-hour chart, gold price holds below the 50- and 100-hour Exponential Moving Averages (EMAs), which means the past of least resistance is to the downside. Meanwhile, the Relative Strength Index (RSI) is located in bearish territory below 50, activating the bearish momentum for gold price.

Resistance level: $1,917, $1,945 and $1,970
Support level: $1,895, $$1,865 and $1,830