• Gold Price consolidates the recovery as the US dollar turns south with Treasury yields.
• A typical pre-Fed anxiety looms, as investors await Fed Chair Powell’s presser.
• The tide could turn in favor of XAU/USD buyers on a likely dovish Fed pivot.

Gold price is capitalizing on the renewed US dollar weakness, as Treasury yields feel the heat from a typical market anxiety pre-US Federal Reserve (Fed) event.

The Asian equities were a mixed bag, as the Chinese tech stocks-led rally fizzled and growth concerns resurfaced amid the extension of the covid lockdowns across many cities in the country. Meanwhile, the benchmark US 10-year rates are heading back towards the 4.0% key level, allowing gold price to stay afloat.

All eyes now remain on the expected 75 bps Fed rate hike decision, with Chair Jerome Powell’s press conference to grab the limelight, as investors eagerly await any hints of a smaller rate increase from December. Ahead of the Fed event, the US ADP Employment Change data will be also followed, as it may offer temporary trading opportunities. Meanwhile, traders may take cues from ADP jobs, waiting it out for Friday’s Nonfarm Payrolls release.

Also read: Gold Price Forecast: XAUUSD bulls could target $1,675 on Federal Reserve’s dovish signal

From a near-term technical perspective, despite the 14-day Relative Strength Index (RSI) lurking below the midline, a dovish Fed rate hike could turn the table against bears, allowing XAU/USD bulls to recapture the bearish 21-Daily Moving Average (DMA) at $1,660 convincingly.  Gold bulls could flex their muscles towards the end-October high at $1,675 while gathering strength to challenge the $1,700 mark.

However, on a hawkish surprise, gold price could resume its broader downtrend, with the initial support seen at the recent range lows around $1,638. The next downside cap is aligned at the $1,620 round number, below which the October low at $1,617 could be threatened.

Gold Price: Daily chart

Gold Price: Additional technical levels to consider