Gold Price Prediction: XAU/USD swings sideways around $1,630 as investors anticipate Fed Chair Powell's address

The gold price (XAU/USD) is demonstrating a lackluster performance as investors remain on the sidelines in anticipation of Federal Reserve (Fed) chair Jerome Powell's address. The precious gold is fluctuating at $1,630.00 after a slight dip from the crucial $1,640.00 barrier. As a result of the exhaustion of the asset's downward momentum, the asset's volatility has decreased, and further erratic price swings are anticipated.

Wednesday, the yellow metal will dance to the sounds of Fed Powell's speech. Given the current state of affairs, Fed Chairman Powell will adopt a "hawkish" tone and recommend further policy tightening. Focus will be placed on the rate hike schedule for the remainder of 2022, as the chosen strategy will set the stage for the 2023 rate hike cycle.

In the meantime, the US dollar index (DXY) hopes to surpass 115.00 for the first time in twenty years. The DXY bulls have been bolstered by a less-than-anticipated decrease in US Durable Goods Orders and a rise in Consumer Confidence. The reduction in demand for Durable Goods was 0.2% as opposed to the expected dip of 0.4%. Consumer Confidence rose to 108.0 from 103.6 in the most recent report.

On a daily scale, gold prices have produced an Inverted Hammer candlestick pattern. For the aforementioned candlestick, there are two schools of thought: the traditional feels that the formation is a sign of reversal, while the unconventional deems it bearish because sellers emerged as the prices settled. Additionally, buyers did not hold holdings overnight.

For the counter, the horizontal resistance from the September 16 low of $1,654.17 will operate as a formidable obstacle.

At $1,653.85, the decreasing 10-period Exponential Moving Average (EMA) adds to the downside filters. As the Relative Strength Index (RSI) (14) oscillates in oversold area below 30.00, a decline cannot be ruled out.