Gold Price Forecast: XAU/USD looks to break below $1,840 as US inflation is seen stable above 8%

Gold price is expected to register a vertical downside move after violating the critical support of $1,840.
Higher-than-expected US NFP has bolstered gold bears as Fed’s rate hike announcement looks imminent.
The Fed is highly focused to tame the inflation pressures.

Sagar Dua FXStreet

Gold price (XAU/USD) is oscillating in a minor range of $1,840.70-1,842.60 in early Tokyo after an initiative selling structure. The precious metal witnessed a sheer downside move after experiencing a significant selling pressure from Monday’s high near $1,858.00. A pullback move towards $1,858.00 was capitalized by the market participants for initiating fresh shorts on the counter.

The deadly duo of upbeat US Nonfarm Payrolls (NFP) and higher expected US inflation is keeping the luster of the bright metal in check. Last week, the US economy reported the number of generated employment opportunities in May at 390k, significantly higher than the expectations of 325k. While the Unemployment Rate remained stable at 3.6%. A tight labor market in the US and its ability to multiply job opportunities has delighted Federal Reserve (Fed) policymakers. The agency could continue its rate hike announcements with affordable barricades.

The US Bureau of Labor Statistics is expected to report the annual inflation figure at 8.2, a little lower than the former figure of 8.3%. Mounting inflationary pressures are denting the real income of households and expectations of a consecutive jumbo rate hike by the Fed are soaring vigorously.

Gold technical analysis

On an hourly scale, Gold spot (XAU/USD) is on the verge of displaying a breakdown of an Inverted Flag, which will keep the gold bears on the driving seat. The 50- and 200-period Exponential Moving Averages (EMAs) are an inch far from displaying a death cross at $1.851.45. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bearish range of 20.00-40.00, which signals a continuation of the downside move by the precious metal further.

Gold hourly chart

XAU/USD

Overview
Today last price	1840.88
Today Daily Change	-10.12
Today Daily Change %	-0.55
Today daily open	1851

Trends
Daily SMA20	1843
Daily SMA50	1892.27
Daily SMA100	1888.79
Daily SMA200	1841.32

Levels
Previous Daily High	1874.16
Previous Daily Low	1847.4
Previous Weekly High	1874.16
Previous Weekly Low	1828.55
Previous Monthly High	1909.83
Previous Monthly Low	1786.94
Daily Fibonacci 38.2%	1857.62
Daily Fibonacci 61.8%	1863.94
Daily Pivot Point S1	1840.88
Daily Pivot Point S2	1830.76
Daily Pivot Point S3	1814.12
Daily Pivot Point R1	1867.64
Daily Pivot Point R2	1884.28
Daily Pivot Point R3	1894.4

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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