Gold Price Forecast: XAU/USD oscillates inside the previous day’s range, investors await US PMI
- Gold prices are juggling inside Wednesday’s value area amid the unavailability of any potential trigger.
- The DXY is displaying a lackluster performance ahead of the US PMI.
- Investors should brace for a consecutive 75 bps rate hike by the Fed.
Gold price (XAU/USD) is displaying volatility contraction as investors are awaiting the release of the US Purchase Managers Index (PMI) data, which is due in the New York session. The precious metal is auctioning inside the previous day’s range. On Wednesday, the precious metal traded in the boundary of $1,823.45-1,847.93. An auction inside the previous day’s value area dictates that the market participants are awaiting a potential trigger for a decisive move.
Meanwhile, the US dollar index (DXY) has turned sideways after facing barricades around 104.30. It looks like the DXY has failed to capitalize on hawkish guidance in Federal Reserve (Fed) chair Jerome Powell’s testimony. Fed Powell dictated that the US central bank is strongly committed to bringing price stability to the economy. Therefore a consecutive rate hike announcement by 75 basis points (bps) in July monetary policy looks likely as price pressures have not displayed even a minor impact of the prior interest rate hikes.
On the economic data front, the market participants are expecting a mixed performance from the PMI figures. The Manufacturing PMI is expected to slip to 56 from the prior print of 57. While the Services PMI may advance marginally to 53.5 from the former figure of 53.4.
Gold technical analysis
On an hourly scale, the gold prices have displayed a failed attempt of overstepping the downward sloping trendline placed from the June 16 high at $1,857.58 but is attempting to surpass again. The greenback bulls have defended the 200-period Exponential Moving Average (EMA) at $1,837.50. Meanwhile, the Relative Strength Index (RSI) (14) has returned into the 40.00-60.00 range after failing to sustain above 60.00.
Gold hourly chart
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.
