Gold Price Forecast: XAU/USD stays above key support $2,470 and now the eyes on Powell speech

• As we anxiously await Powell’s Jackson Hole speech this Friday, the old price maintains its late Thursday comeback.
• Gold price is still on track to recapture $2,500 on dovish Powell’s remarks and positive technical.
• The US Dollar is back in the red due to Treasury bond rates on dovish Fed bets and the USD/JPY sell-off.

Following its late-day surge on Thursday, the price of gold is back in the green zone early on Friday. Given the recent sell-off in the USD/JPY and the negative yield on US Treasury bonds, the recovery in gold prices may be associated with the start of the US Dollar’s (USD) collapse.

The price of gold appears Powell’s remarks for a new beginning

As they eagerly await US Federal Reserve (Fed) Chair Jerome Powell’s Jackson Hole appearance for new clues on the central bank’s interest-rate path, markets have remained risk averse in Asian trading this Friday. This is especially true given that traders have priced in aggressive Fed rate cuts on indications of loosening labor market conditions.

Risk-off flows increase the demand for US government bonds as a shelter, which weighs on Treasury bond yields throughout the curve and lowers the USD. The continued sell-off in the USD/JPY is mostly concentrated in the Greenback as a result of Bank of Japan (BoJ) Governor Kazuo Ueda’s hawkish comments made in front of the parliament on Friday.

Ueda reiterated that interest rates would be raised if inflation continued to steadily approach the 2.0% objective, although he expressed caution about the state of the financial markets.

The price of gold is expected to record a weekly loss for the second week in a row despite the recent increase, as a September interest rate drop by the Fed appears inevitable. Nonetheless, determining the extent of the anticipated easing in the upcoming months depends heavily on Fed Chair Jerome Powell’s remarks.

The US Dollar sharply recovered from over a year-lows vs its main competitors on Thursday, and the price of gold had a roughly 1% correction as risk sentiment soured in response to weak US S&P Global Business PMIs and Jobless Claims data. In addition, traders engaged in repositioning ahead of Powell’s Jackson Hole confrontation on Friday.

Gold price technical analysis: Daily chart