Gold Price Forecast: XAU/USD establishes above $1,850 as DXY weakens, focus is on US Inflation


  • Gold price is holding itself above $1,850.00 as investors ignored uncertainty ahead of the US inflation.
  • The DXY has witnessed a decent sell-off which could drag the asset towards 102.00.
  • Higher inflation and upbeat NFP will compel the fed to feature a bumper rate hike.

Gold price (XAU/USD) has displayed a minor correction after recording a high around $1,856.00 on Tuesday but is holding strongly above the crucial resistance of $1,850.00 as the US dollar index (DXY) has slipped sharply.  The precious metal has been advancing higher gradually after hitting a low of $1,837.06 and is expected to extend gains if the bright metal oversteps Tuesday’s high at $1,855.64.

The DXY surrendered the majority of its gains recorded on Tuesday after failing to cross the critical barricade of 102.83. A rebound in the risk-on impulse after investors ignored the uncertainty ahead of the US inflation strengthened the risk-perceived currencies and the precious metal. The US Consumer Price Index (CPI) is expected to remain unchanged at 8.3% while the core CPI that doesn’t include food and energy prices may slip to 5.9% vs. the prior print of 6.2%.  

The sustainability of the US inflation above 8% is going to put forward complications for the Federal Reserve (Fed). The Fed is going to dictate its monetary policy next week and elevated inflation along with the upbeat US Nonfarm Payrolls (NFP) will compel a rate hike decision.

Gold technical analysis

On an hourly scale, the gold price is oscillating in a wider range of $1,828.98-1,874.16 for a prolonged period. The precious metal is forming a Darvas Box chart pattern that signals a slippage in volatility followed by a breakout in the same. A 50-period Exponential Moving Average (EMA) at $1,849.74 is overlapping to the prices, which signals a rangebound move going forward.

Meanwhile, the Relative Strength Index (RSI) is struggling to enter into the bullish range of 60.00-80.00. An establishment in the same will strengthen the gold bulls.

Gold hourly chart

XAU/USD

Overview
Today last price 1852.36
Today Daily Change 10.93
Today Daily Change % 0.59
Today daily open 1841.43
 
Trends
Daily SMA20 1842.36
Daily SMA50 1889.93
Daily SMA100 1889.04
Daily SMA200 1841.44
 
Levels
Previous Daily High 1857.99
Previous Daily Low 1840.73
Previous Weekly High 1874.16
Previous Weekly Low 1828.55
Previous Monthly High 1909.83
Previous Monthly Low 1786.94
Daily Fibonacci 38.2% 1847.32
Daily Fibonacci 61.8% 1851.4
Daily Pivot Point S1 1835.44
Daily Pivot Point S2 1829.46
Daily Pivot Point S3 1818.18
Daily Pivot Point R1 1852.7
Daily Pivot Point R2 1863.98
Daily Pivot Point R3 1869.96

 

 

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