Gold Price Forecast: XAU/USD slips below $1,790 as DXY extends recovery, Michigan CSI eyed
|- Gold price has slipped to near $1,785.00 as the DXY has advanced above 105.00.
- The precious metal has shifted into a healthy correction phase.
- A little higher consensus for Michigan CSI has supported the DXY bulls.
Gold price (XAU/USD) has dropped to near $1,785.00 after surrendering the critical support of $1,788.00 in the Asian session. The precious metal has entered into a healthy correction phase after printing a fresh monthly high at $1,807.96 on Wednesday.
Investors are trimming their gold positions after realizing that the lower US Consumer Price Index (CPI) for a single month can trim the hawkish guidance by the Federal Reserve (Fed) but cannot shrug off the odds of a rate hike in September. To be noted, the plain-vanilla US CPI landed at 8.5%, lower than the forecasts and the prior release of 8.7% and 9.1% respectively.
Meanwhile, the US dollar index (DXY) has extended its recovery after a confident pullback move and has reached to near 105.40. Now, the market participants are shifting their focus toward the US Michigan Consumer Sentiment Index (CSI), which is due on Friday. The sentiment data is expected to improve to 52.2 from the prior release of 51.5. A consecutive improvement is expected in the confidence of consumers after the data slipped to 50 for the first time in the past 20 years.
Gold technical analysis
Gold price has surrendered the cushion of the lower portion of the Rising Channel at $1,788.00, formed on the four-hour scale. The upper portion of the above-mentioned chart pattern is placed from July 22 high at $1,739.37 while the lower portion is plotted from July 27 low at $1,711.55.
A golden cross, represented by the 50-and 200-period Exponential Moving Averages (EMAs) at $1,768.90 adds to the upside filters.
While the Relative Strength Index (RSI) has shifted into the 40.00-60.00 range pertaining to a mild correction but is likely o find support at 40.00
Gold four-hour chart
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