Gold Price Forecast: XAU/USD tests $1780 support as Fed minutes-led sell-off extends

• Gold price is sold-off into hawkish Fed minutes, signaling tapering this year.
• Dollar bulls flex their muscles, covid fears add to their strength.
• Gold Price Forecast: Bears back in town as markets digest FOMC, USD goes bid

Gold price is pressurizing lows near $1780, looking for a sustained break below the round number to extend the downside towards the $1750 support area. The bearish sentiment grips gold price, as the US dollar holds the higher ground amid a double booster shot.

The July Fed meeting minutes showed that the officials discussed tapering plans before the end of this year, which gave a shot in the arm for the dollar optimists.

Meanwhile, growing fears over the Delta covid variant spread weighs on the market mood, bolstering the safe-haven demand for the greenback.

Looking ahead, amid a lack of relevant US economic news, the covid updates and the dynamics in the dollar will continue to have a significant impact on gold price. Hawkish Fed expectations will likely keep gold bulls on the defensive.

However, the risk-off trading in the global stocks combined with weaker Treasury could likely offer some reprieve to gold bulls.

Gold Price Chart: Daily

Looking at gold’s daily chart, the price turned south after having failed to find acceptance above the critical short-term resistance at 21-Daily Moving Average (DMA) of $1788.

The bears now look to take out Wednesday’s low of $1777 to flex their muscles towards the August 16 low of $1770.

Further south, the $1750 psychological support could come into play should the downside accentuate.

The 14-day Relative Strength Index (RSI) has changed its course and re-entered the bearish territory, backing a potential move lower.

On the upside, daily closing above the 21-DMA is critical to reviving gold’s recovery momentum from five-month troughs.

The bulls will then battle the bearish 50-DMA at $1795. However, only a sustained break above the $1800 mark could negate the near-term downside bias.

The level to beat for gold bulls is at the 100-DMA resistance line of $1808.

Gold Price: Additional levels to watch