Gold Price Forecast: XAU/USD stays below 20-day EMA on broader risk-on rally

• Gold price strives to gains ground while broader risk rally dampens safe-haven demand.
• The Israel-Iran ceasefire has strengthened investors' risk appetite.
• Fed Powell stated on Tuesday that the current monetary policy is appropriate considering uncertainty surrounding the tariff policy.

Gold price (XAU/USD) consolidates around $3,325 during European trading hours on Wednesday. The precious metal wobbles inside the Tuesday's trading range, while its outlook seems uncertain as investors continue to increase bets in riskier assets, following the announcement of a ceasefire between Israel and Iran on Tuesday.

Easing geopolitical tensions often lead to a decline in demand for safe-haven assets, such as Gold.

United States (US) President said in a post on Truth.Social on Wednesday the both Israel and Iran have agreed to a truce and urged them not to violate the same.

Meanwhile, the comments from Federal Reserve (Fed) Jerome Powell in his semi-annual testimony on Tuesday in which he dashed hopes of an interest rate cut in the July monetary policy meeting has also weigh on the Gold price.

Jerome Powell stated that the central bank is "well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance". Powell guided that the central bank will closely monitor the "impact of tariffs imposed by US President Trump on inflation through the June and July data". He added that he will support interest rate cuts sooner if data suggests that the impact of tariffs on inflation is not as big as the Fed anticipated earlier.

Theoretically, higher interest rates by the Fed for a longer period bode poorly for non-yielding assets such as Gold.

Gold technical analysis

Gold price trades in an Ascending Triangle formation on a daily timeframe, which indicates volatility contraction. The horizontal resistance of the above-mentioned chart pattern is plotted from the April 22 high around $3,500, while the upward-sloping trendline is placed from the April 7 low of $2,957.

The precious metal trades below the 20-day Exponential Moving Average (EMA), suggesting that the near-term trend has turned bearish.

The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, indicating a sideways trend.

Looking up, the Gold price would enter in an unchartered territory after breaking above the psychological level of $3,500 decisively. Potential resistances would be $3,550 and $3,600.

Alternatively, a downside move by the Gold price below the May 29 low of $3,245 would drag it towards the round-level support of $3,200, followed by the May 15 low at $3,121.

Gold daily chart