- Gold price is establishing below $1,820.00 on hawkish commentary from Western central banks.
- The DXY is aiming to recapture its 19-year high as US PCE has climbed to 7.1%.
- The precious metal is hovering around the lower portion of the Descending Triangle.
Gold price (XAU/USD) has turned sideways after displaying wild swings in the New York session. The precious metal is oscillating in a narrow range of $1,814.96-1,819.13 after reversing its gains. The speech from Federal Reserve (Fed) chair Jerome Powell brought a sense of volatility in the gold prices and his hawkish commentary was committed to bringing price stability to the US economy.
Investors should start discounting a consecutive rate hike of 75 basis points (bps) as accelerating inflation has become invincible for the US households and they have to face its consequences. The comments from European Central Bank (ECB) President Christine Lagarde that returning to a lower inflation rate is not possible now. The commentary spooked the FX arena and risk-sensitive currencies took a hit.
Meanwhile, the US dollar index (DXY) is aiming to recapture its 19-year high at 105.79 on an improvement in US Personal Consumption Expenditure on a quarterly basis. The US PCE landed at 7.1% from the prior print of 7%. No wonder, the improvement in PCE must bank upon higher prices rather than higher demand. Going forward, the focus will remain on the Core PCE Price Index, which may decline to 4.7% from the prior print of 4.9% on an annual basis.
Gold technical analysis
The gold prices are trading near the potential support of the Descending Triangle pattern. The downward sloping trendline of the above-mentioned chart pattern is plotted from June 16 high at $1,857.58 while the horizontal support is placed from June 16 low at $1,815.73. The 20-period Exponential Moving Average (EMA) at $1,819.36 is acting as a major resistance for the counter. Meanwhile, the Relative Strength Index (RSI) (14) is holding itself above 40.00 levels, however, a slippage below the same will bring more weakness in the bright metal.
Gold hourly chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.