Gold (XAUUSD) Price Forecast: Bearish Below 50-Day MA as Powell’s Speech Nears
LONDON (August 22) Gold prices fell for a second straight session on Friday, dragged lower by a strengthening U.S. dollar and fading rate cut expectations ahead of Federal Reserve Chair Jerome Powell’s highly anticipated remarks at the Jackson Hole symposium. XAU/USD dropped further below its 50-day moving average resistance at $3346.00, raising the risk of a deeper retracement toward key support.
Stronger Dollar Weighs on Gold Ahead of Jackson Hole
Daily US Dollar Index (DXY)
The U.S. dollar index edged up 0.1% to 98.71, near a two-week high, as markets reassessed the probability of a September rate cut. A firmer dollar makes gold more expensive for holders of other currencies, pressuring the metal lower. The euro and British pound both slipped to their weakest levels since early August, while the yen weakened to 148.56 per dollar.
UBS strategist Giovanni Staunovo attributed the dip in gold to the firmer dollar and increasing uncertainty around the Fed’s next move. Futures markets, using CME’s FedWatch tool, show a 71-73% chance of a 25-basis-point rate cut in September—down from 85.4% just one week ago.
Mixed Fed Messaging Keeps Markets on Edge
Federal Reserve officials sent conflicting signals this week. Some expressed caution about easing policy too soon, while others left the door open for a rate cut. Chicago Fed President Austan Goolsbee referred to the upcoming FOMC meeting as “live,” while emphasizing mixed data and inflation concerns.
Labor market data remains soft, with last week’s jobless claims rising the most in nearly three months. But inflation remains above the Fed’s 2% target, adding to policy uncertainty. Powell’s speech at 10:00 a.m. EDT is expected to clarify how the Fed will balance inflation risks against a cooling labor market.
Treasury Yields Hold Steady as Market Awaits Fed Guidance
Daily US Government Bonds 10-Year Yield
U.S. Treasury yields were mostly flat, reflecting a wait-and-see mood. The 10-year yield was steady at 4.334%, while the 2-year ticked up slightly to 3.804%. Rate-sensitive yields have been muted this week, as traders await Powell’s guidance on the Fed’s longer-term policy stance.
Gold Prices Forecast: Pressure Builds Below 50-Day Moving Average
Daily Gold (XAU/USD)
XAU/USD remains under pressure, trading below the 50-day moving average at $3346.00. Continued downside momentum could test the $3311.56–$3310.48 support zone. A break below there may open the door toward the July 30 low at $3268.12.
To shift sentiment, gold bulls need to recapture the 50-day moving average. A sustained move above that level could spark upside toward the pivot at $3353.58, with further resistance targets at $3374.81 and $3409.43.
Until Powell’s speech delivers clarity, gold is likely to remain capped by dollar strength and cautious Fed sentiment. Near-term outlook: bearish below the 50-day moving average, currently at $3346.00.
FXEmpire
