Gold Price Forecast: XAUUSD to gather bullish momentum if Fed pushes back against a rate hike in September

Gold set a new five-week top at $1,879 on Monday, then retreats. All eyes remain on the Federal Reserve decision due later this week on Wednesday. The yellow metal could gain bullish momentum if Chairman Jerome Powell pushes back against a rate hike in September, FXStreet’s Eren Sengezer reports.

Fed takes center stage this week

“The Fed is widely expected to hike its policy rate by 50 basis points to the 1.25%-1.5% range. The Fed remains on track to opt for another 50 bps rate increase in July and it shouldn't be a surprise if that's confirmed.” 

“The main question is whether the Fed will pause hikes in September. In case the Fed or FOMC Chairman Jerome Powell pushes back against a rate hike in September, this could be seen as dovish guidance and cause US Treasury bond yields to decline. In that scenario, gold is likely to gather bullish momentum. On the other hand, the dollar should continue to outperform its rivals and weigh on XAUUSD if the Fed leaves the door open for another rate increase in September.”