Gold Price Forecast: XAU/USD aims to recapture $1,800 as investors trim US Inflation forecasts

Gold price (XAU/USD) is displaying a volatility contraction after printing a fresh monthly high at around $1,800.00 on Tuesday. The precious metal witnessed a decent north-side move on Tuesday and later on turned sideways ahead of US Consumer Price Index (CPI). The street estimates are indicating a decent drop in the inflation rate by 40 basis points (bps) to 8.7% from the prior release. However, a surprise move by the price rise index is highly expected.

The investing community is aware of the fact that soaring oil prices remained responsible for driving the price pressures to the sky. Now, fixed supply worries and a gloomy demand outlook on the oil front resulted in a steeper fall in oil prices. And, its multiplier effect will be witnessed in the inflation rate.

Also, the upbeat US Nonfarm Payrolls (NFP) revealed last week indicates that the inflation rate could surprise on the higher side. The US economy has created 528k fresh jobs in July against the print of 372k recorded in June. Well, the troublesome job for Federal Reserve (Fed) policymakers will continue to remain until the dust settles for a longer period.

Gold technical analysis

Gold prices are advancing sharply after a strong rebound from the lower portion of the Rising Channel at around $1,765.00. 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.

The 20-and 50-period Exponential Moving Averages (EMAs) at $1,785.15 and $1,772.00 respectively are scaling higher, which adds to the upside filters.

Also, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates more upside ahead.

Gold four-hour chart