Gold Price Prediction: XAUUSD will acquire bullish momentum if the Fed rejects a September rate rise

On Monday, gold reached a fresh five-week high of $1,879 before retreating. On Wednesday of this week, the Federal Reserve is expected to make a decision. According to the research, the yellow metal might acquire positive momentum if Chairman Jerome Powell opposes a rate rise in September.

Fed is in the spotlight this week

"It is largely anticipated that the Fed would increase its policy rate by 50 basis points to the range of 1.25 percent to 1.5 percent." It shouldn't come as a surprise if the Fed opts for another 50-basis-point rate hike in July.

"The primary issue is whether the Federal Reserve will halt rate rises in September. If the Fed or FOMC Chairman Jerome Powell opposes a rate rise in September, this might be interpreted as dovish signaling and lead to a decrease in US Treasury bond rates. In such a case, gold will certainly gain upward momentum. Alternatively, if the Fed keeps the door open for another rate hike in September, the dollar should continue to outperform its competitors and weigh on XAUUSD.