After two consecutive red days, Gold price (XAU/USD) slightly recovered on Friday. This rebound comes after a 5% correction in bullion after it refreshed its all-time high earlier this week. On the weekly timeframe, the globally preferred store of value is down 3.02%.

Similar price action can be observed in Silver, which showed a 0.98% uptick on Friday after two consecutive daily declines of 3.75% and 2.09%, respectively. The bearish market sentiment in the precious metals comes just days after Gold and Silver hit their fresh yearly highs.

XAU/USD Tumbles After FOMC Minutes

Bullion prices are strongly correlated to the US monetary policy. Therefore, the ongoing Gold price action can be linked to the recently released FOMC minutes which drastically lowered the rate cut expectations. As a result, the probability of a rate cut in September has decreased, and most analysts are now betting on the Fed starting to cut rates in November.

Since the high rates will likely keep the dollar strong in the coming months, the interest in non-yielding assets like Gold, Silver, and Bitcoin will likely be impacted. Concurrently, Goldman Sachs economists have also pushed back their rate cut expectations from July to September, contributing to the bearish outlook.

Gold Price Outlook And Latest Technical Analysis

From the perspective of technical analysis, the XAU/USD pair is looking extremely bullish on the high timeframe as it soared to record highs on May 20. However, the yellow metal could still face more correction in the shorter timeframes.

Even though the Gold price forecast remains positive, the price has been trading within the $2,290-$2,430 range since the mid of April. A recent failed breakout attempt shows that there is not enough demand for bullion above $2,430, which is acting as a strong resistance to the price.

The recent price action suggests that the price is heading for a retest of the range lows around $2,290. This level is a strong support level that must be held to avoid a deeper correction. On the other hand, bulls need to find strength above the $2,430 level to aim for a significant upside and new all-time highs.