Gold Price Forecast: XAU/USD oscillates around $1,810 on volatile DXY, focus is on Fed minutes

Gold price (XAU/USD) is testing the upside break of the consolidation formed in a narrow range of $1,806.60-1,809.89 in the early Tokyo session. On a broader note, the precious metal has turned sideways after a firmer rebound from Friday’s low at $1,784.55.

The gold prices are likely to remain on the tenterhooks ahead of the release of the Federal Open Market Committee (FOMC) minutes on Wednesday. The detailed viewpoint from Federal Reserve (Fed) policymakers on the economic indicators of the US economy especially on the inflation rate and growth projections will support the market participants to adjust their positions on associated assets. Also, investors will be able to scrutiny the further direction of the yellow metal and US dollar index (DXY) in a more informed manner.

Meanwhile, the DXY is holding itself above the psychological resistance of 105.00 comfortably. The DXY is expected to remain sideways till the European session as higher volatility at the open leads to a contraction in the same. This week, apart from the Fed minutes, the US Nonfarm Payrolls (NFP) will be of significant importance. As per the market consensus, the US economy added 270k jobs in June, lower than the prior release of 390k.

Gold technical analysis

The gold prices are forming a Bullish Pennant chart pattern on an hourly scale that displays a consolidation phase, which is followed by a sheer upside move.  The consolidation phase indicates an initiative buying structure in which those investors initiate longs, which prefer to enter after an establishment of the trend. The precious metal is auctioning above the 50-period Exponential Moving Average (EMA) at $1,808.23, which indicates a bullish bias.

However, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which signals the unavailability of any potential trigger as it will continue the consolidation process.

Gold hourly chart