Gold Price Forecast: XAU/USD remains below $1,900, awaits Fed's Jackson Hole Symposium

• Gold price consolidates in a range below the $1,900 mark during the Asian session.
• Hawkish Federal Reserve expectations underpin the US Dollar and cap the upside.
• A weaker risk tone lends support and helps limit losses for the safe-haven XAU/USD.

Gold price struggles to capitalize on the previous day's positive move and oscillates in a narrow trading range below the $1,900 mark during the Asian session on Tuesday. The XAU/USD, for now, seems to have stalled its recent decline witnessed over the past four weeks or so, to the lowest level since March 2023, around the $1,885 region touched last Thursday as traders keenly await more cues about the Federal Reserve's (Fed) policy outlook.

Hence, the market focus will remain glued to the Jackson Hole Symposium later this week, where comments by Fed Chair Jerome Powell will be scrutinized closely for signals on the Fed's future rate-hike path. This will play a key role in determining the near-term trajectory for the non-yielding Gold price. In the meantime, growing acceptance that the Fed will keep interest rates higher for longer assists the US Dollar (USD) to hold steady just below its highest level in more than two months and acts as a headwind for the US Dollar-denominated commodity.

The Fed is expected to pause its rate-hiking cycle in September, though the markets are still pricing in the possibility of one more 25 basis points (bps) lift-off by the end of this year. The bets were lifted by the United States (US) Consumer Price Index (CPI) and the Producer Price Index (PPI), which suggested that the battle to bring inflation back to the Fed's 2% target is far from being won. Moreover, the incoming US macro data continues to point to an extremely resilient economy and support prospects for further policy tightening by the Fed.

Hawkish Fed expectations, meanwhile, remain supportive of elevated US Treasury bond yields and continue to underpin the USD. That said, a generally weaker risk tone might continue to lend some support to the safe-haven Gold price. Investors remain concerned about the worsening economic conditions in China. Moreover, a smaller rate by the People’s Bank of China (PBoC) on Monday, despite worries about a deepening crisis in China's property sector, signals limited policy support for the economy and takes its toll on the risk sentiment.

The aforementioned mixed fundamental backdrop, meanwhile, warrants some caution before placing aggressive directional bets around the Gold price heading into the key event risk. In the meantime, traders on Tuesday will take cues from the US economic docket, featuring the release of Existing Home Sales and Richmond Manufacturing Index later during the early North American session. Apart from this, speeches by a slew of influential FOMC members will play a key role in driving the USD demand and providing some impetus to the XAU/USD.

Technical levels to watch