Market sentiment and risk aversion have been factors behind gold falling by almost $50 in the last 24 hours from 1,985.06 to 1,935.27.

Another reason for XAU/USD falling is that US Treasury yields are rising. The 10-year US Treasury yield stands at 3.606%. A correction is highly probable which could enable the gold price to bounce above 1,937.

The Federal Reserve is widely expected to increase the funds rate by 0.25%. Investors are betting on this policy move and it is likely that the market has already discounted it.

The focus will be on comments by Chairman Jerome Powell which could trigger strong volatility in gold at the time of his speech. A more aggressive comment could strengthen the US dollar and gold could fall towards the psychological level of 1,900.

Technically, gold has found support around 6/8 Murray located at 1,937. If it trades above this level in the next few hours, it is likely that it could reach the area of the daily pivot point of around 1,953 and could even reach the 21 SMA located at 1,958.

In case this scenario comes true, we could buy gold above 1,937 with targets at about 1,958. A pullback to the 21 SMA located at 1,958 is expected to occur which will give us an opportunity to sell with targets at about 1,937. If bearish pressure persists, the instrument could drop to 1,906 and even lower to the psychological level of 1,900.