Gold Price Forecast: XAU/USD tumbles toward $1,940 on Fed hawkish skip

• Federal Reserve keeps rates unchanged at 5.00-5.25%. 
• Dot plot shows a higher peak policy rate at 5.35% in September. 
• US Dollar rises across the board, Gold tumbles as US yields soar. 

Gold Price tumbled after the Federal Reserve kept interest rates unchanged for the first time after raising rates for ten consecutive meetings. XAU/USD dropped from $1,952 to the $1,940 area.

As mostly expected, the Fed kept the Fed funds target range at 5.00-5.25. The "skip" is seen as hawkish considering that the economic projections from the FOMC staff show the peak rate a bit higher at 5.35%.

With the Fed signaling that more rate hikes are likely, US Treasury bonds tumbled. The 10-year yield jumped from 3.78% to 3.85% and the 2-year from 4.64% to 4.80%. The US Dollar Index recovered from daily losses, rising back to the 103.25 area.

XAU/USD lost more than $10 in a few seconds, hitting a fresh daily low at $1,939. Gold is under pressure, looking at the $1,940 support area. A break lower could trigger more losses.

Market participants now await Chair Powell's press conference. Volatility is expected to remain elevated. If Gold recovers, resistance is seen at $1,955, followed by the daily high at $1,960.

Technical levels