Gold Price Forecast: XAU/USD declines towards $1,690 on hawkish Fed bets, US Retail Sales eyed

Gold price (XAU/USD) has shifted into a negative trajectory as the asset has slipped below Wednesday’s low at $1,693.67. The precious metal is declining towards $1,690.00 as bears are taking charge of soaring odds for a bumper rate hike by the Federal Reserve (Fed) ahead.

Tuesday’s higher-than-expected release of the US Consumer Price Index (CPI) has faded the signs of exhaustion recorded earlier. Despite falling gasoline prices, the headline US CPI released higher at 8.3% than forecasts of 8.1%. The investing community believed that the inflation mess has started responding to rising interest rates by the Federal Reserve (Fed) and sooner a series of decline in price pressures will facilitate the fed to shift to a ‘neutral’ stance.

However, an above-expectations release of the US inflation has cleared that the road to neutral policy is too far from over. And, expectations of a full percent rate hike are trending now.

In today’s session, the release of the US Retail Sales will be of utmost importance. The forecasts for economic data are not revealing any improvement in retail demand. This may be a result of a decline in the confidence of consumers in the economy.

Gold technical analysis

The gold prices have witnessed a steep fall after displaying a textbook kind of test and drop of a consolidation breakdown. The consolidation formed in a range of $1,697.12-1,709.62 on an hourly scale. The yellow metal is trading below the 20-period Exponential Moving Average (EMA) at $1,698.70, which adds to the downside filters.

Also, the Relative Strength Index (RSI) has established in a bearish range of 20.00-40.00, which indicates more weakness ahead.

Gold hourly chart