Gold Price Steadies Near $4,400 as Hike Bets Rise
Gold price action has steadied at around $4,400 amid rising bets of a September Federal Reserve rate hike. This move follows an unexpectedly hawkish message from Fed Chairman Kevin Warsh at the Jackson Hole summit. Warsh urged policymakers to focus on prices and said that the central bank 'has work to do' to bring inflation back down to its 2% target.
Investors have ramped up bets of a September hike, with the CME's FedWatch Tool showing 61% probability, up from 36% the previous day. This has contributed to a risk-off reaction in markets, which has underpinned support for the safe-haven US Dollar.
The XAU/USD price is currently trading below its 200-day simple moving average (SMA) at $4,528, a level that bears see as a key technical indicator. Momentum indicators are also showing a neutral-to-negative stance, with the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) hinting at waning upside momentum.
The immediate support for gold price is seen at Friday's floor in the $4,400 area, followed by the August 14 low near $4,310 and the August 6 low, near $4,225. Bulls will face challenges at the mentioned 200-day SMA and the August 27 low near $4,565 ahead of last week's highs, near $4,700.