Gold (XAUUSD) Price Forecast: Dollar Strength Sends Gold Into 50-Day MA as Powell Risk Fades

Gold Slides Below Key Support as Dollar Gains and Fed Uncertainty Eases

Gold prices are under pressure on Thursday, pulling back from Wednesday’s spike after U.S. President Donald Trump walked back threats to fire Federal Reserve Chair Jerome Powell.

XAU/USD fell sharply after failing to hold above the short-term pivot at $3347.97, triggering a drop toward the 50-day moving average at $3324.00.

At 11:43 GMT, XAU/USD is trading $3324.18, down $23.42 or -0.70%.

Gold Retreats After Powell Rumors Fizzle

On Wednesday, gold surged as much as 1.6% following rumors that Trump was preparing to remove Powell, raising fears over Fed independence.

However, Trump later clarified, “We’re not planning on doing it,” though he added that firing Powell is not completely off the table. The reversal in tone unwound much of gold’s gains, with traders unwinding safe-haven positions.

Commodities strategist Nitesh Shah of WisdomTree said, “Yesterday, gold prices rose on the back of these rumors, which were unfounded. Since the rumors were quelled, prices have been falling.” With markets now less concerned about Fed leadership changes, focus is shifting back to economic fundamentals and incoming data.

Dollar Strength Adds Pressure to Gold Prices

The U.S. Dollar Index rose 0.3%, making gold more expensive for holders of other currencies. The euro retraced early gains against the dollar, while the yen fell 0.6% to a multi-month low as political risks grow ahead of Japan’s election. Sterling and commodity-linked currencies like the Aussie and Kiwi also weakened, providing further tailwinds to the dollar.

A stronger dollar combined with stabilized Treasury yields reduced the appeal of non-yielding assets like gold. The U.S. 10-year yield edged up to 4.467%, while the 2-year yield climbed to 3.915%. This minor steepening in the yield curve came as markets briefly priced in the possibility of Fed policy interference but quickly reversed course.

All Eyes on U.S. Economic Data and Fed Commentary

With the Trump-Powell drama cooling off, traders are now watching key U.S. data due Thursday, including retail sales, jobless claims, and import/export price indexes. Several Fed officials are also set to speak, potentially clarifying the rate outlook. If the data come in soft, gold could find renewed support.

Meanwhile, geopolitical risk lingers in Asia. Japan faces an election and unresolved tariff disputes with the U.S., both of which could reignite safe-haven flows into gold if tensions rise.

Forecast: Bearish Unless 50-Day Moving Average Holds

Technically, gold remains vulnerable unless buyers defend the 50-day moving average at $3324.00. A sustained move below this level would likely target previous support zones near $3282.66 and $3244.41. Conversely, a rebound that takes out $3377.66 would open the door for a run toward $3451.53.

For now, gold prices forecast remains bearish unless a bullish catalyst—such as dovish Fed commentary or weak U.S. data—emerges to reverse the momentum.

More Information in our Economic Calendar.