Gold Price Forecast: XAU/USD jumps to near $3,370, following base-building near 20-EMA

LONDON (July 21) Gold price (XAU/USD) advances to near $3.370 during the European trading session on Monday. The precious metal gains as the US Dollar (USD) corrects after failing to extend its recent upside move. Technically, lower US Dollar makes the Gold price an attractive bet for investors.

At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, retraces to near 98.15 from the four-week high around 99.00.

The US Dollar faces selling pressure even though traders see a lesser chance that the Federal Reserve (Fed) will cut interest rates in the policy meeting in September. According to the CME FedWatch tool, the probability for the Fed to reduce interest rates in the September meeting has declined to 58.5% from almost 70% seen a month ago. The tool also shows that the Fed will leave borrowing rates steady in the policy meeting scheduled for next week.

Traders pare Fed dovish bets after the release of the United States (US) Consumer Price Index (CPI) data for June, which showed that the impact of sectoral tariffs imposed by President Donald Trump has started flowing into prices.

FXStreet