Gold Price Forecast: XAU/USD recovers above $1,990 as USD Index corrects gradually, Fed’s Beige Book eyed
- Gold price has attempted a recovery and has scaled to near $1,994.60 amid a mild correction in the USD Index.
- It would not be justified considering Gold’s recovery move as a reversal as bets for one more rate hike from the Fed is extremely solid.
- Fed’s Beige Book will provide cues about the current economic situation of 12 Fed districts.
Gold price (XAU/USD) has shown a recovery move after printing an eight-day low of $1,981.02 on late Monday. The precious metal has rebounded to near $1,996.00 after a mild correction in the US Dollar Index (DXY). It would not be justified considering the recovery move as a reversal as bets for one more rate hike from the Federal Reserve (Fed) are extremely solid.
S&P500 futures are choppy in early trade after a bullish Monday. US equities are ignoring China-Taiwan tensions, portraying a risk-on mood. Reports showed that Taiwan will purchase up to 400 land-launched harpoon missiles to repel a potential Chinese invasion, completing a deal approved by Congress in 2020.
The US Dollar Index (DXY) is juggling above 102.00 after a mild correction. The upside bias has not faded yet as Federal Reserve (Fed) policymakers are not convinced of easing inflationary pressures. and CEO of the Federal Reserve Bank of Richmond Thomas Barkin said in the late New York session that he wants to see more evidence of inflation settling back to target.
This week, the release of Fed’s Beige Book will be keenly observed. The report will provide cues about the current economic situation of 12 Fed districts. Also, it will provide a true picture of retail demand and employment levels on a regional basis.
Gold technical analysis
Gold price is hovering near the lower portion of the Rising Channel chart pattern formed on a two-hour scale. The precious metal dropped sharply after failing to test the critical resistance of $2,050.00 but has found an intermediate cushion near the Rising Channel edge. The 20-period Exponential Moving Average (EMA) at $2,005.60 is acting as a barricade for the Gold bulls.
The Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, indicating activation of bearish momentum.
Gold two-hour 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.
