GOLD Consolidates Weekly Loss as Investors Await Fed Decision

Ahead of the Federal Reserve's interest rate decision, the Gold Price (XAU/USD) is consolidating its weekly loss. Despite market players overwhelmingly expecting the Fed to maintain its current stance, there is potential for surprises from the dot-plot and Chairman Powell's speech, which could impact bullish sentiment for XAU/USD. The Gold Price remains relatively stable due to cautious optimism and a weaker US Dollar, although several factors are limiting its upside potential.

XAU/USD has managed to recover slightly, putting an end to a three-day downtrend and consolidating its weekly loss as it prepares for the upcoming Federal Open Market Committee (FOMC) meeting. However, the pre-Fed nervousness, coupled with ongoing US-China tensions, and higher Treasury bond yields have previously exerted downward pressure on XAU/USD. Nevertheless, the US Dollar's decline in response to disappointing US inflation figures, as indicated by the Consumer Price Index (CPI) and Core CPI for May, has renewed the interest of Gold buyers.

While US inflation data has already challenged the Federal Reserve's previous rate hike trajectory spanning 18 months, it is not expected to prompt a dovish shift in the central bank's stance. The focus will be on the economic forecasts, dot-plot projections, and Chairman Jerome Powell's press conference for clearer guidance. If Fed policymakers indicate the possibility of a rate hike in July and beyond, the Gold Price may lose favor among buyers, potentially pushing XAU/USD below the $1,960 resistance level. However, dovish remarks could provide the impetus for XAU/USD to surpass this hurdle.

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