Gold forecast Fed hawkish statements pushed gold to $1,715 based on the XAU/USD Exchange Rate

The XAU/USD gold price is still under pressure near $1,734 despite having broken through a crucial short-term support line the day before. As a result, the precious metal justifies the safe-haven demand for US dollars during Monday's slow Asian session, when the market is reacting to a combination of conflicting data, recession fears, and hawkish Fedspeak.

Fed Chairman Jerome Powell began his remarks at the annual Jackson Hole Symposium by saying, "Restoring price stability will take some time, entail deploying central bank's powers 'forcefully.'" The policymaker also noted that it will likely take'some time' for a restrictive policy stance to be necessary to restore price stability. Similar sentiments were expressed by Federal Reserve Bank President Loretta Mester, who said that she would focus on US inflation statistics rather than the carefully watched jobs report in deciding whether to support a third consecutive 75-basis point interest rate hike next month.

Recession worries were exacerbated by the Fed's hawkish stance, which should be noted. However, US Senator Elizabeth Warren expressed concern on Sunday that the Federal Reserve will lead the US economy into recession, as reported by Reuters.

A report presented at the Jackson Hole Symposium said that governments need to do their share by implementing more conservative budget policies if central banks are to succeed in controlling inflation. "If the monetary tightening is not accompanied by the expectation of sufficient fiscal adjustments, the deepening of fiscal imbalances leads to even stronger inflationary pressure," said Francesco Bianchi of Johns Hopkins University and Leonardo Melosi of the Chicago Fed.

Meanwhile, rising geopolitical tensions between the United States and China support the DXY and put downward pressure on gold prices. On Sunday, Reuters reported that Chinese military officials had indicated their country was keeping a close eye on U.S. Navy ships passing through the Taiwan Strait and that they were on high alert and prepared to counter any provocation.

As a result of these maneuvers, the major indices on Wall Street all fell by more than 3.0%, while 10-year US Treasury yields rose slightly to close the week at roughly 3.04%. As of this writing, Wall Street has down more than 1.0%, and the S&P 500 Futures reflect this.

The XAU/USD pair is expected to be under pressure towards the short-term critical support region due to the risk-off sentiment and stronger US dollar. Nonetheless, significant data, including as Friday's US jobs report for August, might put the metal bears to the test in the days and weeks to come.

If the XAU/USD pair breaks down below the rising trend line it has been following for the past five weeks, it will head for the horizontal area containing various levels noted since mid-July, between $1,715 and $12.

The RSI conditions may pose a threat to the XAU/USD pair's continuation lower than $1,712, but if that doesn't hold, the $1,700 barrier may show up as the bulls' final line of defense before the yearly bottom near $1,680 comes into focus.

Gold's short-term upside is capped by a support-turned-resistance line near $1,740, the 10-day moving average (DMA) (about $1,751), and the 50-day moving average (MA) (around $1,763). After that, the bulls of XAU/USD appear to have a difficult time breaking through a downward sloping resistance line from early June, around $1,788.