Gold Price Forecast: XAU/USD hesitates around $3,400, still holds 20-day EMA

• Gold price retraces to near $3,360 as three-day upside move hits pause.
• Traders remain confident of Fed's interest rate cuts in September.
• US President Trump will announce Fed Kugler's replacement this week.

Gold price (XAU/USD) corrects to near $3,360.00 on Wednesday after a three-day winning streak. The precious metal retraces even as traders remain increasingly confident that the Federal Reserve (Fed) will resume its monetary-expansion cycle in the September policy meeting.

Lower interest rates by the Fed bode well for non-yielding assets, such as Gold.

Traders raised Fed dovish bets significantly as the United States (US) Nonfarm Payrolls (NFP) report for June has shown signs of a slowdown in the labor demand.

Meanwhile, US President Donald Trump has stated that he will announce Fed Governor Adriana Kugler's replacement this week. Market experts believe that the entry of Trump's candidate in the rate-setting committee will favor lower interest rates, given that Trump has criticized the Fed, especially Chairman Jerome Powel, a number of times for supporting a restrictive monetary policy stance.

Also, US President Trump has narrowed list of potential candidates as the successor of Jerome Powell. We're also looking at the Fed chair, and that's down to four people right now, Two Kevins and two other people," Trump said in an interview with CNBC on Tuesday. His comments signal that White House economic adviser Kevin Hassett, former Fed Governor Kevin Warsh are potential candidates to step in place of Powell.

Gold technical analysis

Gold price trades inside the Symmetrical Triangle formation, which indicates indecisiveness among market participants. The yellow metal oscillates around the 20-day Exponential Moving Average (EMA), which trades near $3,323, indicating a sideways trend.

The 14-day Relative Strength Index (RSI) wobbles inside the 40.00-60.00, suggesting a sharp volatility contraction.

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 an 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