Golds Bottom: Where is the XAU/USD Price Forecast Heading?

28 September 2023, Thursday
Golds Bottom: Where is the XAU/USD Price Forecast Heading?

Gold Prices Drop as Fed’s Hawkish Stance Takes Hold


Gold Prices Hit Lowest Point Since March


Gold prices have fallen to levels not seen since March. This is because the Federal Reserve (also known as the Fed) has been talking about raising interest rates. When interest rates go up, it can make gold less attractive to investors.


Fed President Neel Kashkari’s Comments


Neel Kashkari, who is a member of the Federal Reserve, recently said that the Fed might need to raise interest rates one more time and keep them high until 2024. This has caused US Treasury yields to go up, which in turn has affected gold prices.


US Economy and Job Market


The US economy is doing okay, but there are some concerns about inflation. However, the job market is strong, which is good news. As long as the job market stays strong, the Fed might keep interest rates high for a longer time.


What to Expect from the Fed


The rest of the day will be focused on what the Federal Reserve says. Jerome Powell, who is the Chair of the Federal Reserve, will be speaking. After Neel Kashkari’s comments caused some chaos in the markets, it will be interesting to see if other Fed officials agree with him.


How Fed’s Decisions Affect Gold


If the Fed hints at raising rates even more and keeping them high for a long time, it could be bad news for gold. On the other hand, if they talk about lowering rates, it could be good news for gold.


Gold Price Trends


Looking at the chart, there are two signs that gold prices might keep going down. First, there was a breakout from a pattern called a symmetrical triangle, which pushed prices below the $1900 mark. Second, the 50-day moving average crossed below the 200-day moving average, which is not a good sign for gold. Even though the Relative Strength Index (RSI) shows that gold is oversold, there is still a chance for prices to drop even more.


What Retail Traders Are Doing


Right now, most retail traders are holding onto their gold investments. About 81% of traders have long positions, which means they think gold prices will go up.