Gold Price Forecast: XAU/USD gains as oil rally eases, upside seems limited amid hawkish Fed bets

Gold price (USD) is up 1.15% to near $4,320 during the European trading session on Thursday. The precious metal gains as rally in oil prices cool down after Saudi Arabia mulls alternatives to ship energy products.

According to a Times of India (ToI) report, Saudi Arabia is offering additional crude cargoes to Asian refiners through ship-to-ship transfers off Oman's Sohar port.

Gold price has been carrying a negative relationship with oil prices as higher energy prices de-anchor inflation expectations, a scenario that prompts fears of interest rate hikes by global central banks.

Meanwhile, the upside in the Gold price appears to be limited as market experts see more interest rate hikes by the Federal Reserve (Fed) in the near term.

On Wednesday, the Fed hiked interest rates by 25 basis points (bps) to 3.75%-4.00%, as expected, and its dot plot signaled that 16 of 18 policymakers see at least one more interest rate hike this year. Fed Chair Kevin Warsh didn’t participate in the dot plot projections.

Money markets fully factor in further Fed tightening

According to strategists at Deutsche Bank, the Fed’s latest move has triggered a notable shift along the front end of the US curve, with “money markets moved to price in more tightening, with another 75bps of Fed hikes now being fully priced by next June (+10.8bps on the day), and with a hike around 50% priced for the upcoming October meeting.”

Gold Technical Analysis

In the daily chart, XAU/USD trades at $4,314.02, holding a bearish near-term bias as it remains below the 20-day exponential moving average (EMA) at $4,364.99. The price action suggests gold is capped by this dynamic resistance, while the Relative Strength Index (RSI) at 46.39 hovers just below neutral, hinting at waning upside momentum rather than outright oversold conditions.

On the topside, immediate resistance is located at the 20-day EMA near $4,365, followed by the September 8 high near $4,443. On the downside, the Gold price could fall to the psychological level of $4,000 if it falls below the Wednesday's low at $4,235.40.