Gold (XAUUSD) Price Forecast: Market Stalls at 50-Day Average Awaiting Powell Signal

Gold Price Forecast: XAU/USD Firms as Traders Await Fed and Powell’s Policy Signal

Gold prices edged higher on Wednesday as traders attempted to recover from a four-day, $137.28 correction. The move comes after two sessions of tight-range trading, suggesting the market is on hold ahead of the Federal Reserve’s policy statement and Chair Jerome Powell’s press conference, both scheduled for later today.

At 10:26 GMT, XAU/USD is trading $3329.17, up $2.50 or +0.07%.

Fed Decision and Powell Comments to Set the Tone

The Federal Reserve is expected to leave interest rates unchanged, with Fed funds futures pricing in a 98% probability that rates remain in the 4.25%–4.5% range. However, the focus will be on Powell’s tone during the press conference. Analysts from Deutsche Bank note Powell is unlikely to rule out a September rate cut but also won’t raise expectations for it. With markets pricing in two cuts before year-end, traders will be watching closely for any sign of internal dissent or dovish leanings.

U.S. Treasury yields were largely unchanged ahead of the decision, with the 10-year yield at 4.328% and the 2-year slightly lower at 3.867%. Yields remaining elevated limits gold’s upside, but a dovish Fed tone could reverse that.

Dollar Pullback Offers Breathing Room for Gold

The U.S. Dollar Index slipped 0.13% to 98.774 after hitting a five-week high of 99.143 on Tuesday. This pullback gave gold some breathing room, with the metal marginally higher in early trade. A weaker dollar makes gold more attractive for foreign buyers, and recent softness may be a sign of risk aversion heading into key central bank announcements.

Ongoing tariff negotiations between the U.S. and China, and recent trade agreements with Japan and the EU, have improved global risk sentiment. However, geopolitical concerns—including a major earthquake near Japan and persistent trade tensions—continue to underpin gold as a hedge.

Technical Levels: 50-Day Moving Average Remains Key

The market tone will hinge on price action around the 50-day moving average at $3343.70. Immediate support is at $3310.48 and this week’s low at $3301.76. Below that, key levels sit at $3282.66 and $3244.41. On the upside, resistance lies at $3347.97 and $3370.40.

Gold Market Forecast: Bullish Breakout Possible if Fed Leans Dovish

Gold remains range-bound ahead of the Fed, but the setup favors a bullish break if Powell hints at easing later this year.

With geopolitical concerns and dollar weakness offering tailwinds, a close above the 50-day moving average could trigger renewed buying interest.

If the Fed delivers a neutral or hawkish tone, however, gold could drop below $3300.

Traders should monitor Powell’s press conference for the next directional cue.

More Information in our Economic Calendar.