Gold Price Forecast: XAU/USD may attract a downward bias on likely hawkish stance from the Fed

• Gold prices have sensed support near 200-period EMA at $1,975.40.
• A mixed bag from the Russia-Ukraine war has shifted the focus of investors to Fed’s policy action.
• Intensifying fears of stagflation claims a modest hawkish stance from the Fed.

Gold (XAU/USD) is likely to juggle on Monday as broader risk-off impulse may provide tailwinds on the downside while upside gains will remain capped on a likely hawkish stance this week. The odds of an interest rate hike decision by the Federal Reserve (Fed) are very much lucrative; however, the concept that will hold the nerves of investors will be the extent of the interest rate hike.

Gold prices are getting mixed cues from the Russia-Ukraine war headlines. At once, U.S. Deputy Secretary of State Wendy Sherman said Russia was showing signs of willingness to engage in substantive negotiations about ending a conflict on Sunday. While, on the risk-off impulse side, Russian missiles attack on large Ukrainian base near the border with NATO member Poland escalated fears of third world war.

Therefore, the Russia-Ukraine war headlines will remain a mixed bag for the precious metal so investors will focus on likely monetary policy action by the Fed this week. Russia's invasion of Ukraine has put forward a tedious job for the central banks. The cues from the US Consumer Price Index (CPI) dictate a 50 basis point (bps) interest rate decision from the Fed on a print of 7.9% without considering the impact of higher oil prices. While the intensifying fears of stagflation claim a modest hawkish stance from the Fed.

Gold Technical Analysis

On an hourly scale, XAU/USD is auctioning in a falling channel that signals for a lackluster move with a negative bias. The precious metal has sensed support near 200-period Exponential Moving Average (EMA) at $1,975.40. The Relative Strength Index (RSI) (14) is oscillating in a range of 40.00-60.00, which signals a back and forth movement in the precious metal ahead.

Gold hourly chart