Gold Price Forecast: Can XAU/USD Hold Above $2,000 as Fed Signals Pause?

Gold prices are holding steady above the $2,000 psychological mark, with last week’s rebound near $1,980 offering temporary support. On Friday, the metal managed to close above key technical levels, but its inability to break out of the broader range highlights ongoing uncertainty. While the Federal Reserve’s recent signals of a pause in rate hikes provided some relief for bulls, XAU/USD remains caught between conflicting pressures.

The technical picture shows gold still below its 20-day and 50-day exponential moving averages, leaving the broader bias neutral for now. Buyers need to reclaim higher ground to change the narrative, while sellers continue to guard the $2,020-$2,040 resistance zone closely.

Key Levels and Technical Outlook

• Resistance: Gold remains capped by $2,020, a zone that aligns with the 20-day EMA. If this level gives way, the next hurdle lies at $2,040, which would signal a potential path toward the $2,070 region.
• Support: On the downside, $2,000 is the key level for bulls to defend. A break below this could invite selling pressure, with $1,980 and $1,950 serving as the next targets.

Momentum indicators remain mixed. The RSI hovers below 50, pointing to a lack of bullish momentum, while the MACD shows signs of flattening out but remains below the zero line.

Market Drivers

Gold’s recent resilience can be attributed to the Federal Reserve’s dovish tone on future rate hikes, which eased upward pressure on Treasury yields. However, broader risk sentiment remains fragile, with concerns about inflation and slowing global growth keeping traders cautious. Seasonal holiday flows could also play a role in determining near-term price action.

Outlook

For gold to re-establish a bullish trend, buyers need to push XAU/USD above $2,040 and sustain gains beyond this level. Failure to do so leaves the metal vulnerable to further declines, with $2,000 and $1,980 likely to come under pressure. With markets entering a quieter phase, sharp moves cannot be ruled out if liquidity dries up.