Gold Price Prediction: The Gold Market Is Due For A Rebound Soon

The price of gold is still below the threshold of $1,800 per ounce prior to the Fed minutes of the meeting. The current environment with high interest rates continues to be an important bearish factor of the metal's price.

Fundamentals

On the other hand, recent data suggests there was evidence that US consumer prices rose at a lower-than-expected pace in July following a decline in gasoline prices. However, the hawkish remarks by several Fed officials are in the news ahead of this week's Fed meeting minutes due for release on Wednesday.

Amid the strong US economy and less-than-expected inflation numbers, bets on the Fed's stance at its September meeting have fluctuated between a rate hike of between 50 or 75 basis points. Subsequently, July's meeting minutes are set to avail further information on how the US central bank's next move.

Gold price could have found its short-term bottom at the one-year low it hit in mid-July, at $1,681.16. But, it is likely to remain under pressure in coming months amid an environment with high interest rates. This is due to the Fed's belief that fighting the decades-long rise in inflation is its first priority.

Given that US inflation is likely to remain high in the fourth quarter, investors will be keen on the economic data and how it affects the Fed's strategy to reduce price pressures. In order to move higher, bulls will have to build enough energy to smash through resistance that lies in the psychologically critical zone of $1,800.

Gold price prediction

Gold prices slid on Tuesday, even though it trades within a rather tight range ahead of the Fed meeting minutes. As shown on its four-hour chart, it is below the 25 as well as 50 day exponential averages. Based on these indicators, the precious metal is likely to remain under pressure in the near-term.

I expect gold price to remain volatile as investors await further cues from the Fed minutes of the meeting. Therefore, 1,783.03 is located along the 50-day EMA, will be a resistance level worth watching in the short term. While the trading range-bound continues, the bulls are keen to defend the resistance zone which is 1,773.73.

In reaction on the FOMC minutes, the market could reverse further, aiming to find an area of support around 1,767.53. Interestingly, this bearish view will be invalidated by a price rise of 1,791.89 since it would signal enough momentum for bulls to retest the psychologically important zone of 1,800.