XAU/USD forecast: Gold trying to decide where to go
XAU/USD forecast: Gold trying to decide where to go
Gold is consolidating around $1,925 amid uncertainty over the Federal Reserve's (Fed) interest rate outlook.
Gold remains under pressure as forecasts released by the U.S. central bank showed that most officials believe the Fed's benchmark overnight interest rate will be 5.6% this year, suggesting another hike in the next three months. In addition, the USD index (DXY), which tracks the dollar against six major world currencies, remains above 105, indicating that the U.S. currency is strengthening.
Investors are reassessing the U.S. economic outlook based on the Fed's latest projections that the federal funds rate will be at least 5.1% by the end of 2024, 0.5% higher than announced three months ago. By the end of 2025, the discount rate will be close to 4%, with Fed members not expecting inflation to be under control until 2026 but with interest rates well above pre-pandemic levels.
Gold is currently down 0.05% at $1,923.9.
The short-term forecast is for a further decline and a test of support at $1,895. The price is expected to rise further, with a target above the $2,080 level. A test of the trend line on the Relative Strength Indicator is in favor of the price increase. Cancellation of the bullish trend option will be a fall and breakdown of the level of $1,840, which will indicate the continuation of the decline in quotes to the area below the level of $1,795.
Read more: BTC is falling despite bullish forecasts.
