Gold Price Forecast: XAU/USD struggles below $4,300 level with bears still in control

Gold prices (XAU/USD) experienced a slight dip on Friday, trading just below the $4,300 level after rebounding from support in the $4,230 area on Thursday. The overall bearish trend, however, remains in place due to expectations of further Federal Reserve rate hikes and long-term US Treasury yields remaining above 5%. Fed officials have emphasized a hawkish stance this week, with Philadelphia Fed President Anna Paulson suggesting "modest" rate increases to achieve inflation targets, and New York Fed President John Williams stating that "another US rate hike this year" is plausible.

In the near term, OCBC strategists believe that oil prices and interest rate responses will be the primary factors influencing gold's movement. They highlight that easing in energy prices or the US dollar could help stabilize gold, while a further rise in yields would keep the near-term bias under pressure. As of the 4-hour chart, XAU/USD is trading at $4,290, with neutral-to-bearish momentum indicators, indicating the volatility of the current recovery attempt.

The Relative Strength Index (14) is just below the 50 midline, and the Moving Average Convergence Divergence (MACD) indicator is approaching the zero line. Bulls have been struggling below $4,300 so far, but a break above the horizontal barrier at the $4,400 level could alleviate negative pressure and shift focus towards early September highs just above $4,500.

Conversely, the $4,230 area, previously a low in August and September, could serve as key support. If this level fails, the next resistance levels in the $4,100-$4,150 area may be targeted, followed by lows just above the $4,000 psychological level.