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

Gold prices are declining sharply towards $1,690.00 as odds for a Fed’s full percent rate hike soar.
The road to a neutral stance policy for the Fed is far from over.
The preliminary estimates for the US Retail Sales are displaying stagnation.

Sagar Dua FXStreet

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

XAU/USD

Overview
Today last price	1691.92
Today Daily Change	-5.30
Today Daily Change %	-0.31
Today daily open	1697.22

Trends
Daily SMA20	1725.12
Daily SMA50	1740.12
Daily SMA100	1790.02
Daily SMA200	1832.43

Levels
Previous Daily High	1707.2
Previous Daily Low	1693.76
Previous Weekly High	1729.57
Previous Weekly Low	1691.47
Previous Monthly High	1807.93
Previous Monthly Low	1709.68
Daily Fibonacci 38.2%	1698.89
Daily Fibonacci 61.8%	1702.07
Daily Pivot Point S1	1691.59
Daily Pivot Point S2	1685.95
Daily Pivot Point S3	1678.15
Daily Pivot Point R1	1705.03
Daily Pivot Point R2	1712.83
Daily Pivot Point R3	1718.47

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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