Gold Price Forecast: XAU/USD trades indecisively below $3,400, holds key 20-day EMA

LONDON (June 19) Gold price (XAU/USD) trades in a limited range below the round-level resistance of $3,400 during European trading hours on Thursday. The upside in the yellow metal appears to have been capped by upwardly revised interest rate target for 2026 and 2027 by the Federal Reserve (Fed) on Wednesday, following leaving them unchanged in the range of 4.25%-4.50% for the fourth straight meeting.

The Fed warned of increasing upside risks to inflation due to the imposition of tariff policy by Unted States (US) President Donald Trump raised inflation target for 2026 and 2027 to 3.6% and 3.4%, respectively.

Gold performs firmly in a high-inflation environment, however, higher interest rates by the Fed for a longer period bodes poorly for non-yielding assets.

On the downside, the yellow metal remains well-supported amid tensions escalating in the Middle East region.

Financial market participants have become concerned over the future of the Iran’s economy as the United States (US) considers striking Tehran, which is already battling a war with Israel.

According to a Bloomberg report, senior US officials are preparing for the possibility of a strike on Iran in the coming days. Earlier in the day, US President Donald Trump kept the scope of attacking Iranian nuclear facilities. “I may do it. I may not do it,” Trump said when asked whether he will launch airstrikes on Iranian nuclear facility earlier in the day, NBC News reported.

Theoretically, the demand for safe-haven assets, such as Gold, increases amid heightening geopolitical tensions.

FXStreet