Gold H4 Forecast Gold (XAU/USD) is trading sideways on Friday, reversing its two-session decline amid some respite in the USD and Treasury yields after their robust advance this week. As of now, the gold/XAUUSD pair is trading at $4,297 after hitting its lowest level, $4,244, since last week. In the immediate fundamental picture, gold still faces significant downside pressure and appears vulnerable to closing lower this week. The prospect of further tightening from the Fed remains the major factor putting upward pressure on the USD and downward pressure on gold. At last week's meeting, the Fed raised the policy rate by 25 basis points, bringing the range to 3.75%-4.00%. Moreover, according to its dot plot forecasts, 16 out of 18 officials anticipate another policy hike in 2023. Speculation regarding further interest rate hikes, starting as early as next month, became prevalent during the trading week following better-than-expected US PMI readings. Furthermore, Federal Reserve policymakers such as Federal Reserve Bank of New York President John Williams noted, "We must return inflation down to our goal as soon as possible." It was also reasonable to predict "a final rate increase before year-end," he added. Fed Bank of Richmond President Tom Barkin mentioned rising inflation concerns, extending past energy and tariffs' impacts. Based on current market sentiment, the CME FedWatch tool indicates about a 71% chance of a rate hike at the October meeting. Consequently, this led to significant gains in the USD and Treasuries. A stronger USD tends to make gold costlier for international investors, while rising yields make gold less attractive because it pays no interest. Currently, DXY is trading near 101, having touched 101.40 on Thursday – its highest level in nearly two months. The benchmark 10-year US Treasury yield is also steady near 5.17%, down from Thursday's high of 5.22%. Yields last traded above this threshold in 2007, making this a clear concern for bulls. In addition, rising oil costs because of the ongoing conflict in the Middle East add to inflation concerns. Policymakers are finding it increasingly difficult to bring inflation back to 2%. According to Reuters, Iran pledged to re-open the Strait of Hormuz in seven days if America reduces military presence and removes its blockade. At the same time, the two sides discussed a staged agreement, but Reuters added that there is still no progress toward resolving the dispute remains limited. Gold on the H4 time chart is trading with a bearish-to-neutral bias. Since the Friday open, yellow metal has remained under bears' control. At the time of writing, XAU/USD is currently trading at $4,297. However, bulls tried to rebound and succeeded in extending the bullish wave above $4,300, reaching a daily high of $4,315, which again triggered fresh bearish pressure. However, the pair traded in range between yesterday's low of 4244 and high of 4315. Yet momentum oscillators on the 4-hour time frame signal a lack of clear direction, with some signals reflecting weakness in price action. The Relative Strength Index holds slightly under the neutral 50 mid-line, while the MACD lines approach zero. No decisive move has emerged yet. Bullish momentum has failed to sustain price above the $4,300 threshold so far. Immediate resistance sits at the horizontal $4,400 level, which has blocked bullish momentum several times this week. From the bullish perspective, if buyers hold support at 4244, it could motivate a fresh buying stream. From this angle, buyers would face immediate resistance at 4325 at the 50-day SMA. If buyers find a foothold above 4325, it could trigger another bullish wave, targeting 4350 resistance, where the 100-day SMA adds resistance. Indeed, a trendline has protected 4350 resistance. Furthermore, once buyers surpass this barricade, the next resistance is near the $4,500 early September peak. On the bears' side, 4244 support held strongly throughout the week. If sellers pierce 4244, the next emerging support sits at $4,224, coinciding with the August 6 and September 16 lows. Below this level, previous resistance barriers at $4,100-$4,150 will come into play before reaching July-August lows above the significant $4,000 psychological mark.
