Gold Price Forecast: XAU/USD auctions below $1,750 on higher expectations for US Inflation

Gold price is oscillating below 1,750.00 as odds of soaring price pressures are supporting the greenback.
The collaboration of lower paychecks and the higher inflation rates will bring a serious slump in the overall demand.
Consolidation is expected ahead as the RSI is oscillating in a 40.00-60.00 range.

Sagar Dua FXStreet

Gold price (XAU/USD) is displaying back-and-forth moves in a narrow range of $1,742.93-1,744.62 in the Asian session. The precious metal is auctioning below the round-level resistance of $1,750.00 as the market participants are expecting an acceleration in the price pressures.

The gold prices may face severe heat as the higher inflation print by the US Bureau of Labor Statistics will strengthen the greenback. As per the market consensus, the US Consumer Price Index (CPI) is seen higher at 8.7% than the prior estimate of 8.6%. This will compel the Federal Reserve (Fed) to feature a consecutive 75 basis point (bps) interest rate hike.

However, the inflation rate in conjunction with the lower Average Hourly Earnings is not painting a rosy picture for the greenback. Soaring price pressures are highly required to be equalized with higher earnings and stagnancy in the wage rates is hurting the ‘paychecks’ of the households. This may have a significant impact on the aggregate demand as lower-valued paychecks will result in lower consumption and savings for the households.

Gold technical analysis

On an hourly scale, the gold prices have turned sideways in a range of $1,730.73-1,752.49 after a downside move. The 20-period Exponential Moving Average (EMA) at $1,742.35 is overlapping with the prices of the precious metal. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range, which bolsters the odds of consolidation ahead.

Gold hourly chart

XAU/USD

Overview
Today last price	1743.68
Today Daily Change	1.12
Today Daily Change %	0.06
Today daily open	1742.56

Trends
Daily SMA20	1809.35
Daily SMA50	1833.74
Daily SMA100	1885.92
Daily SMA200	1845.84

Levels
Previous Daily High	1752.49
Previous Daily Low	1730.73
Previous Weekly High	1814.37
Previous Weekly Low	1730.73
Previous Monthly High	1879.26
Previous Monthly Low	1802.79
Daily Fibonacci 38.2%	1744.18
Daily Fibonacci 61.8%	1739.04
Daily Pivot Point S1	1731.36
Daily Pivot Point S2	1720.17
Daily Pivot Point S3	1709.6
Daily Pivot Point R1	1753.12
Daily Pivot Point R2	1763.69
Daily Pivot Point R3	1774.88

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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