Focus remains on Federal Reserve decision next week

The focus, however, remains on the outcome of a two-day Federal Open Market Committee (FOMC) meeting, scheduled to be announced next Wednesday. The markets still seem convinced that the US central bank will soften its stance and have been pricing in a greater chance of a 25 bps rate hike on February 1. Heading into the key central bank event risk, traders might refrain from placing aggressive bets. This further makes it prudent to wait for strong follow-through selling before confirming that Gold price has topped out in the near term.

Gold price technical outlook

From a technical perspective, any further slide below the $1,920 resistance breakpoint, now turned support, is likely to attract fresh buyers around the $1,911-$1,910 support zone. This, in turn, should help limit the downside for the XAU/USD near the $1,900 round-figure mark. The latter should act as a pivotal point, which if broken decisively might shift the near-term bias in favour of bearish traders and pave the way for a meaningful corrective decline.

On the flip side, the multi-month peak, around the $1,949 area touched on Thursday, now seems to have emerged as an immediate strong barrier. Some follow-through buying has the potential to lift the Gold price to the $1,969-$1,970 region. The momentum could get extended further, which should allow the XAU/USD bulls to surpass an intermediate hurdle near the $1,980 zone and reclaim the $2,000 psychological mark for the first time since March 2022.