Gold Outlook Remains Bearish Ahead of Powell, Greenback Dominates

A weak trend in gold prices (XAU/USD) is emerging as investors sit on the sidelines awaiting the Federal Reserve System's (FRS's) Chairman Jerome Powell's speech.

There has been a slight decline in the price of gold after hitting a critical level of $1640. A reduction in volatility is expected due to the exhaustion of downside momentum.

The yellow metal may dance to the sound of Powell's Fed performance on Wednesday. Powell will sound dovish and mention further monetary tightening, given the current situation.

It will be about the rate hike roadmap until the end of 2022 since the approach taken will determine the course of the rate hikes in 2023.

In the meantime, the US Dollar Index (DXY) has crossed 115.00 for the first time in two decades. DXY bulls were supported by smaller-than-expected declines in US durable goods orders and rising consumer confidence.

According to the report, durable goods demand declined by 0.2%, while a decline of 0.4% was expected. Compared to the previous version, consumer confidence rose to 108.0 from 103.6.

The 4-hour chart shows a dismal picture of the gold. The price is near the key support and multi-month lows of $1,620. The metal may slip towards the $1,600 level if the support is broken.

Alternatively, if bulls emerge around the support, the price may jump back to $1,640 ahead of $1,660. However, the probability of an upside breakout is low at the moment. 

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