- Gold price is forming a Bullish Flag pattern that shouts further upside.
- Risk-off impulse has underpinned the bright metal despite the DXY.
- The lack of economic catalysts this week advocated risk sentiment to dictate the gold prices.
Gold price (XAU/USD) is consolidating below $1,850.00 in a minor range of $1,840.02-1,844.08 in the early Asian session. The precious metal has delivered a perpendicular upside move on Thursday from a low near $1,800.00 as the risk-off impulse favors the precious metal rather than underpinning the greenback.
A significant plunge in the US dollar index (DXY) despite heightened negative market sentiment in the FX domain has supported the gold prices. The DXY has surrendered more than 2.20% gains after printing a 19-year high of 105.00 last week. It worth be worth stating that extremely overbought oscillators have resulted in a meaningful correction in the asset as the solid fundamentals are still intact amid expectations of policy tightening by the Federal Reserve (Fed).
The movement in the gold prices has remained dependent on the sentiment amid a lack of important economic events this week. However, the comments from Philadelphia Fed Bank President Patrick Harker brought some loud moves in the bright metal. The Fed policymaker advocated two more 50 basis points (bps) interest rate hikes in June and July, which should be followed by the old tradition of the 25 bps rate hike spell.
Gold technical analysis
The gold prices are forming a Bullish Flag chart pattern that signals a continuation of bullish momentum after a consolidation phase. This consolidation phase denotes an inventory distribution that forces an intensive buying interest from the market participants. The 50-period Exponential Moving Average (EMA) at $1,827.68 is scaling higher, which adds to the upside filters. Adding to that, the Relative Strength Index (RSI) (14) has shifted into a bullish range of 60.00-80.00, which signals significant gains ahead.
Gold hourly chart
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