Gold Price Forecast: XAU/USD bounces to near $1,850, investors await US inflation

Gold price has tumbled to near $1,850.00 on rising odds of a jumbo rate hike by the Fed.
The market participants may get divided on upbeat NFP and lower inflation forecasts.
Descending EMAs and weak RSI (14) are indicating more downside for the yellow metal.

Sagar Dua FXStreet

Gold Price (XAU/USD) has witnessed a minor bounce after slipping near the previous week’s low at $1,850.47. A minor responsive buying has been observed yet but value buying can drive the asset higher. The bright metal has displayed a sheer downside on Monday amid broader strength in the US dollar index (DXY).

Investors are aware of the fact that upbeat US Nonfarm Payrolls (NFP) has bolstered the odds of a rate hike by the Federal Reserve (Fed) in June. The US Bureau of Labor Statistics disclosed 428k job additions in the labor force against the expectations of 391k. Higher job creation has signaled a tight labor market that may compel the Fed to come forward with one more 50 basis points (bps) interest rate hike. On the other hand, US inflation is seen lower at 8.1% against the multi-decade high of 8.5%. A lower US inflation print could dictate not so aggressive monetary policy by the Fed.

Considering the rally in the DXY, it is very much clear that investors are underpinning an upbeat NFP rather than a softer Consumer Price Index (CPI).

Gold technical analysis

The precious metal is hovering near its critical support which coincides with January’s high and the previous week’s low at $1,854.20. The 20- and 50-period Exponential Moving Averages (EMAs) at $1,872.84 and $1,883.61 respectively are sloping downwards, which adds to the downside filters. Meanwhile, the Relative Strength Index (RSI (14) has slipped below 40.00, which signals a firmer downside move ahead.

Gold four-hour chart

XAU/USD

Overview
Today last price	1854.2
Today Daily Change	-29.78
Today Daily Change %	-1.58
Today daily open	1883.98

Trends
Daily SMA20	1922.15
Daily SMA50	1935.38
Daily SMA100	1881.69
Daily SMA200	1835.4

Levels
Previous Daily High	1892.59
Previous Daily Low	1866.18
Previous Weekly High	1909.83
Previous Weekly Low	1850.44
Previous Monthly High	1998.43
Previous Monthly Low	1872.24
Daily Fibonacci 38.2%	1882.5
Daily Fibonacci 61.8%	1876.27
Daily Pivot Point S1	1869.24
Daily Pivot Point S2	1854.51
Daily Pivot Point S3	1842.83
Daily Pivot Point R1	1895.65
Daily Pivot Point R2	1907.33
Daily Pivot Point R3	1922.06

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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