Gold Price Forecast: XAU/USD Slips Below 20-Day EMA as Risk Appetite Strengthens

Gold Price Forecast: XAU/USD Slips Below 20-Day EMA as Risk Appetite Strengthens

The gold price (XAU/USD) is struggling to gain momentum, hovering around $3,325 during the European session on Wednesday, as investors rotate toward riskier assets in response to easing geopolitical tensions and Federal Reserve (Fed) policy expectations.

Ceasefire Reduces Geopolitical Premium

Following the announcement of a ceasefire between Israel and Iran, risk appetite surged across global markets. This has weighed heavily on traditional safe-haven assets like gold. The U.S. President confirmed on Wednesday via Truth Social that both nations agreed to the truce, further dampening near-term demand for gold.

Fed Powell’s Cautious Tone Adds Pressure

During his semi-annual testimony on Tuesday, Fed Chair Jerome Powell signaled that the current monetary policy stance remains appropriate, especially in light of uncertainties surrounding the impact of U.S. tariffs on inflation.

“We are well-positioned to wait and learn more about the likely course of the economy,” Powell said.

He noted that the Fed will closely monitor June and July inflation data, particularly for signs that recent tariffs imposed by President Trump may or may not significantly influence price pressures. A less severe inflationary impact could potentially accelerate the timeline for interest rate cuts, but Powell made it clear that such a move would depend strictly on data.

Gold Technical Outlook: Below 20-Day EMA

Gold remains below its 20-day exponential moving average (EMA), a key technical level. The price is currently consolidating within Tuesday's range, reflecting indecision among traders amid mixed cues from geopolitics and monetary policy.

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