Gold Price Forecast: XAU/USD stays below 20-day EMA on broader risk-on rally

LONDON (June 25) Gold price (XAU/USD) consolidates around $3,325 during European trading hours on Wednesday. The precious metal wobbles inside the Tuesday’s trading range, while its outlook seems uncertain as investors continue to increase bets in riskier assets, following the announcement of a ceasefire between Israel and Iran on Tuesday.

Easing geopolitical tensions often lead to a decline in demand for safe-haven assets, such as Gold.

United States (US) President said in a post on Truth.Social on Wednesday the both Israel and Iran have agreed to a truce and urged them not to violate the same.

Meanwhile, the comments from Federal Reserve (Fed) Jerome Powell in his semi-annual testimony on Tuesday in which he dashed hopes of an interest rate cut in the July monetary policy meeting has also weigh on the Gold price.

Jerome Powell stated that the central bank is “well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance”. Powell guided that the central bank will closely monitor the “impact of tariffs imposed by US President Trump on inflation through the June and July data”. He added that he will support interest rate cuts sooner if data suggests that the impact of tariffs on inflation is not as big as the Fed anticipated earlier.

Theoretically, higher interest rates by the Fed for a longer period bode poorly for non-yielding assets such as Gold.

FXStreet