XAU/USD Forecast: Gold consolidates weekly gains, with sight on $2,600 and beyond

• Gold price consolidates below record highs at $2,600 early Friday, as Fedsepak awaited.  
• As traders digest the Fed’s big rate cut, the US Dollar licks wounds with Treasury bond yields.
• Gold buyers stay hopeful amid the daily bullish RSI, as $2,600 resistance appears at risk.

The gold price is attempting to extend the momentum of the previous day’s recovery early Friday, thereby consolidating weekly gains in the face of the overnight weakness in the US Dollar (USD) and the US Treasury bond yields. Traders are currently anticipating the speeches of monetary policymakers from the US Federal Reserve (Fed) in order to obtain new insights into the central bank’s future interest rate policies.

Fedspeak is observed as the gold price takes a break.

The USD has temporarily halted its recent decline as markets become risk-averse and deviate from the Wall Street rally in response to the People’s Bank of China (PBOC) decision to maintain the mortgage lending rate at the same level. Markets anticipated that the Chinese central bank would reduce the Loan Prime Rates (LPR) in response to the increasing concerns regarding an economic decline.

Gold purchasers appear to be cautioned by a stabilising US Dollar; however, the downside is mitigated by the increased demand for the traditional safety asset amid concerns regarding China. In anticipation of the Bank of Japan’s (BoJ) policy announcements, they also exercise caution and refrain from placing new wagers.

Despite the widespread expectation that the BoJ will maintain its interest rate policy, any unexpected development could prompt volatility in the USD/JPY pair, which in turn could affect the price of gold denominated in USD.

However, the gold price may experience a fleeting correction if traders adopt a profit-taking strategy in anticipation of the US macro data and Fed Chair Jerome Powell’s appearance next week.

In the face of the two-way swings in the US Dollar, the bright metal staged a solid rebound on Thursday, but it fell barely short of the all-time high of $2,600. Traders were analyzing the dovish Fed outlook, the return of risk appetite, and mixed US Jobless Claims and Existing Home Sales data.