Gold Price Forecast: XAU/USD consolidates around 100-day SMA as traders await Fed, ECB policy meetings – by hareshmenghani Gold Commodities Fed ECB XAUUSD
ving Average through the Asian session. The XAU/USD currently trades just above the $1,960 level, nearly unchanged for the day, as traders keenly await this week's key central bank event risks before positioning for a firm near-term direction.
The Federal Reserve will announce the outcome of its two-day policy meeting on Wednesday and is expected to hike interest rates by 25 basis points . Investors are also betting that the Fed will signal an that its is coming close to the end of the current rate-hiking cycle. That said, doubts that the Fed will commit to a more dovish policy stance assists the to preserve its goodish recovery gains from the lowest level since April 2022 touched last week and acts as a headwind for the Gold price.
This will be followed by the European Cetnral Bank meeting on Thursday. The broader consensus is that the ECB will again raise borrowing costs by 25 bps and reiterate its committement to continue the current hiking cycle to contain stubbornly high inflation, which is anticipated to stay above the 2% target through the end of 2025. The prospects for further policy tightening by the Fed and theturn out to be another factor capping the upside for the non-yielding Gold price.
Hence, it will be prudent to wait for strong follow-through selling before placing aggressive bearish bets around the Gold price and positioning for an extension of the recent pullback from over a two-month peak touched last week. Market particpants now look to the release of flash Purchasing Managers' Index from the Euro Zone and the United States .
On the flip side, any meaningful positive move now seems to confront stiff resistance near the $1,977-$1,978 zone. This is followed by the monthly peak, around the $1,987-$1,988 region set last week, above which the Gold price could aim to reclaim the $2,000 psychological mark. The upward trajectory could get extended further towards the next relevant hurdle near the $2,010-$2,012 supply zone.
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