Gold Price Forecast: XAU/USD plunges to near $1,860 as DXY gets an adrenaline rush

Gold price has slipped sharply after failing to surpass $1,880.00n advancing hawkish Fed bets.
The DXY has crossed 104.50 amid higher price pressures and a tight labor market.
A formation of an upthrust in the gold prices indicates a buying climax.

Sagar Dua FXStreet

Gold price (XAU/USD) has witnessed a vertical fall after failing to overstep the round-level resistance of $1,880.00. The precious metal advanced sharply on Friday above $1,870.00, attempted to balance above $1,870.00 in the early Asian session but failing to surpass $1,880.00 drifted the gold bulls lower.

A steel fall after an inventory distribution at the open is expected to bring more weakness in the counter. The gold prices have witnessed extreme selling pressure on rising odds of a 75 basis point (bps) interest rate hike by the Federal Reserve (Fed). Soaring price pressures and the upbeat Nonfarm Payrolls (NFP) are expected to compel the Fed to sound extremely hawkish.

The US Consumer Price Index (CPI) landed at 8.6%, higher than the estimates and the former figure of 8.3%. While, the core CPI was released at 6%, higher than the expectations of 5.9%. This indicates that higher food and oil prices are contributing to the inflationary pressures.

Meanwhile, the US dollar index (DXY) is advanced strongly higher above 104.50 on expectations of an extreme hawkish policy by the Fed.

Gold technical analysis

On an hourly scale, the gold prices have witnessed a sell-off after forming an upthrust near $1,880.00, which signals a buying climax, followed by a bearish reversal. The precious metal is holding above the 200-Exponential Moving Average (EMA) at $1,852.20 but is expected to tumble further to near the critical support of $1,830.00. The Relative Strength Index (RSI) (14) has shifted into a 40.00-60.00 range from the bullish range of 60.00-80.00, which signals exhaustion in the upside trend.

Gold hourly chart

XAU/USD

Overview
Today last price	1862.68
Today Daily Change	-8.92
Today Daily Change %	-0.48
Today daily open	1871.6

Trends
Daily SMA20	1847.42
Daily SMA50	1884.18
Daily SMA100	1890.16
Daily SMA200	1842.33

Levels
Previous Daily High	1876.01
Previous Daily Low	1825.1
Previous Weekly High	1876.01
Previous Weekly Low	1825.1
Previous Monthly High	1909.83
Previous Monthly Low	1786.94
Daily Fibonacci 38.2%	1856.56
Daily Fibonacci 61.8%	1844.55
Daily Pivot Point S1	1839.13
Daily Pivot Point S2	1806.66
Daily Pivot Point S3	1788.22
Daily Pivot Point R1	1890.04
Daily Pivot Point R2	1908.48
Daily Pivot Point R3	1940.95

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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