Gold Price Prediction: XAU/USD drops to three-day lows near $1840

• Gold pulls back from weekly highs around $1,870 as investors brace for May Fed minutes.
• The greenback continues to rise, despite falling US bond yields, which weighs on the XAU/USD price.
• Gold Price Forecast (XAU/USD): If it breaks above $1,870, the precious metal will head towards $1,890; Otherwise, a retest of the 200 DMA is expected around $1,839.

Gold (XAU/USD) is slipping below the 20-day moving average (DMA) and accelerating towards the 200-DMA at $1,839.66 on Wednesday, courtesy of a positive market mood. At the time of writing, XAU/USD is trading at $1844.98, down 1.10%.

Dollar strength weighs on gold prices, although US Treasury yields fall

On Wednesday, gold falls along with other precious metals, while the greenback remains buoyant and jumps from weekly lows. The dollar index gains 0.52% and currently stands at 102,300. For its part, the 10-year US Treasury yield remains almost flat on the day, stationed at 2.752%, while market operators await the May minutes of the Federal Reserve Open Market Committee.

On the sentiment side, market players are shrugging off concerns that the Fed’s tightening cycle could trigger a recession. Global equities are posting solid gains. Meanwhile, money market futures showed that investors are reducing their bets on Federal Funds Rates (FFR) for 2023, which are widely expected to end around 3%, to just above the 2.50% threshold.

Gold Price Forecast (XAU/USD): Technical Outlook

On Wednesday, XAU/USD remains under pressure, falling below the 20-DMA and also threatening to slide below the Trending 200 DMA at $1,839.66. It looks like the pullback in gold could be profit taking ahead of the FOMC minutes. However, if the Minutes reinforce the hawkish tone, the yellow metal could head towards the aforementioned 200 DMA and beyond, targeting May lows around the $1786.50.