Gold: XAU/USD Returns Toward $1,965 as Fed Pivot Odds Dim

• The rise in the price of gold stopped at $1,975 and the precious metal returned to its usual range.
• Traders now see less chance of a Fed pivot before the end of the year, weighing on gold.
• ING Bank anticipates a further rate hike and cut before the end of the year, which will drive up the price of gold.

The price of gold Pull back back to a familiar range at $1,950-$60 in the European session on Wednesday. Volatility has faded from markets as fears of a banking crisis fade and bets on a May rate hike revive. Traders now await important data releases such as US Q4 GDP and US jobless claims on Thursday, and probably most important of all, US favorite inflation gauge. US Federal Reserve Personal Consumption Expenditures (PCE) price index on Friday.

Gold price bulls continue to own the trend

The XAU/USD pair may go up and down in the short term, but it is still bullish when viewed from a medium-term perspective. The price of the precious metal continues to mark highs and lows on the daily chart. Therefore, according to the old adage, “the trend is your friend until the curve at the end”, the technical picture favors the bulls.

XAU/USD daily chart

A break above the key March high of $2,009 would be needed to confirm further gains. The next target for the price of gold would then be at the highs of $2,070 in March 2022.

The key swing low of $1,934 on March 22 must hold for gold bulls to retain the upper hand. However, a break and daily close below that level would cast doubt on the overall bullish assessment of the trend. If such a move were to occur, it would likely see a sharp decline to the $1,990 support provided by the 50-day SMA.