Gold Price Forecast: Near-term bias remains bearish as 20-day EMA slops downwards

Gold price (XAU/USD) trades 0.55% lower at around $4,540 during the European trading session on Tuesday. The yellow metal faces selling pressure as United States (US) Treasury Yields remain broadly firm due to expectations that the Federal Reserve (Fed) will not cut interest rates this year.

During the press time, 10-year US Treasury yields are almost flat at around 4.63%, the highest level seen in over a year.

Theoretically, higher yields on interest-bearing assets diminish the appeal of non-yielding assets, such as Gold.

Also, a higher US Dollar (USD) due to firm US bond yields is also weighing on the Gold price. As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.33% higher to near 99.30. Technically, a higher US Dollar makes the Gold price an unfavorable risk-reward bet for investors.

According to the CME FedWatch tool, there is an almost 51% chance that the Fed will hold interest rates at their current levels this year, while the rest favor at least one interest rate hike.

Traders have priced out dovish Fed bets as the US inflation has increased significantly due to elevated oil prices.

Gold technical analysis

XAU/USD trades lower at around $4,540.00 as of writing. The precious metal maintains a bearish near-term tone as it holds clearly below the 20-day Exponential Moving Average (EMA) at $4,646.25. The sustained break under this dynamic barrier keeps the metal under corrective pressure, while the Relative Strength Index (RSI) at 40.04 leans toward bearish momentum without yet signaling oversold conditions, suggesting scope for further downside or extended consolidation beneath the EMA.

On the topside, the 20-day EMA at $4,646.25 is the first key resistance, and a daily close above this level would be needed to ease immediate selling pressure and open the way for a more meaningful recovery towards the May 12 high of $4,773.60. Looking down, the Gold price could slide towards $4,400 if it fails to hold the May 18 low of $4,480.58.

(The technical analysis of this story was written with the help of an AI tool.)