- Gold price has tumbled below $1,880.00 as the DXY has strengthened on the souring market mood.
- Upbeat US NFP has raised the odds of a consecutive rate hike by the Fed in June.
- The US CPI is seen as lower to 8.1% than the former figure of 8.5%.
Gold Price (XAU/USD) is continuously dropping lower in the Asian session after a flat open. The precious metal has displayed a bearish open test-drive session on Monday. The bright metal opened at $1,883.45 and moved a little higher to $1,884.94 but a quick response from responsive sellers dragged the gold prices lower. At the press time, the yellow metal is trading at $1,877.04 and has eased 0.37% from the last week’s closing price, and is inching lower to test the round level support of $1,870.00.
The carry-forward of negative market sentiment on Monday has fueled the US dollar index (DXY). The DXY is advancing higher to test 104.00 as higher-than-expected US Nonfarm Payrolls (NFP) released last week, have bolstered the expectations of one more jumbo rate hike by the Federal Reserve (Fed) in June. Inflation is scaling higher and higher NFP will add to the inflationary pressures as a tight labor market will push the wage price index higher.
This week, the US Consumer Price Index (CPI) will remain in the limelight. The US CPI is seen at 8.1% lower than the prior print of 8.5%. An unexpected slippage seen in the US inflation figures may dent the demand for the DXY as the odds of a bumper rate hike in June will get trimmed.
Gold technical analysis
A formation of a symmetrical triangle chart pattern is signaling indecisiveness in the sentiment of the market participants going forward. The downward trendline is placed from April 29 high at $1,920.02 while the ascending trendline is plotted from last week’s low at $1,855.00. The precious metal has senses resistance from the 200-period Exponential Moving Average (EMA) at $1,888.20.
The momentum oscillator, Relative Strength Index (RSI) is oscillating in a 40.00-60.00 range but on the verge of slipping below 40.00, which will infuse an adrenaline rush into the bears.
Gold hourly chart
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