Gold Price Forecast: XAU/USD finds cushion below $3,300 while 50-day EMA acts as key barrier

• Gold price finds temporary support below near $3,270, while downside seems more likely.
• Traders pare Fed dovish bets as Powell signals no rush of interest rate cuts.
• US President is optimistic about reaching a trade deal with China.

Gold price (XAU/USD) trades almost 1% higher around $3,315 during the European trading session on Thursday. The yellow metal bounces back after its monthly low around $3,270, posted earlier in the day, even as Federal Reserve (Fed) Chairman Jerome Powell has signaled that there is no rush for interest rate cuts.

On Wednesday, Jerome Powell said in the press conference, after the Fed left interest rates steady in the range of 4.25%-4.50%, that the current interest rate stance is "appropriate" to guard against "upside inflation risks".

Fed's support for keeping interest rates at their current levels has also forced traders to pare dovish bets. According to the CME FedWatch tool, the probability for the Fed to cut interest rates in the September meeting has diminished to 43.2% from 63.3% seen on Tuesday.

Higher interest rates by the Fed for longer bode poorly for non-yielding assets, such as Gold.

Meanwhile, an increase in investors' risk appetite due to more deals being signed by Washington has also dampened the Gold price's outlook. Ahead of the August 1 tariff deadline, Washington has reached trade agreements with a number of its leading trading partners, notably Europe and Japan. Trump has also expressed confidence that trade discussions with China are going well and a deal with Beijing looks likely. "We're moving along well with China," Trump said on Wednesday, and added, "I think we'll have a very fair deal with China."

Improving global economic tensions diminish demand for safe-haven assets, such as Gold.

Gold technical analysis

Gold price bounces back near $3,320 to retest the breakdown of the Symmetrical Triangle formation on a daily timeframe. The 50-day Exponential Moving Average (EMA) acts as a key barrier for the gold price around $3,320.

The 14-day Relative Strength Index (RSI) slides to near $40.00. A fresh bearish momentum would emerge if the RSI breaks below that level.

Looking down, the Gold price would fall towards the round-level support of $3,200 and the May 15 low at $3,121, if it breaks below the May 29 low of $3,245

Alternatively, the Gold price will enter uncharted territory if it breaks above the psychological level of $3,500 decisively. Potential resistances would be $3,550 and $3,600.

Gold daily chart