• Gold price consolidates recovery as US dollar turns lower along with Treasury yields.
• Typical pre-Fed anxiety looms as investors await Fed Chairman Jerome Powell’s press conference.
• The tide could turn in favor of XAU/USD buyers on a likely dovish shift from the Fed.

The price of Prayed is capitalizing on renewed US dollar weakness as Treasury yields feel the heat of typical market anxiety ahead of the Fed event.

Asian stocks were mixedas the rally in Chinese tech stocks faded and Growth concerns resurfaced amid the extension of lockdowns in many cities across the country. Meanwhile, US 10-year benchmark rates are heading back towards the key 4.0% level, allowing the gold price to stay afloat.

All eyes are now focused on the expected 75 basis point Fed rate hike decisionwith Chairman Jerome Powell’s press conference in the spotlight, as investors eagerly await any hint of a lower rate hike from December. Ahead of the Fed event, US ADP job change data will also be followed as they may offer temporary opportunities. Meanwhile, traders could follow the ADP employment data, pending the release of Friday’s NFP Non-Farm Payrolls.

From a short-term technical perspective, even though the 14-day RSI is below the midline, a moderate Fed rate hike could turn the tables against bearsallowing XAU/USD bulls to recapture the downsloping 21-day moving average at $1,660 convincingly. Gold bulls could target late October high in $1,675while gathering strength to challenge the level of $1,700.

However, if a surprise occurs, the price of gold could resume its downward trend, with initial support at the recent lows around $1,638. The next support is located at the round level of $1,620below which the October low in $1,617 could be threatened.

gold daily chart

Gold additional technical levels