Gold Price Forecast: XAU/USD recovers intraday losses, downside remains favored on hawkish Fed

Gold price has displayed a rebound after hitting a low of $1,832.41 ahead of US ISM Manufacturing PMI.
Mounting inflationary pressures are hurting the real income of the households.
The US ISM Manufacturing PMI is expected to land at 54.5 vs. 55.4 recorded earlier.

Sagar Dua FXStreet

Gold price (XAU/USD) has witnessed a rebound after a sheer downside move near a two-week low at $1,832.41. The precious metal has recovered its entire intraday losses and may display a bullish open rejection-reverse trading session after overstepping Wednesday’s high at $1,838.62. However, the fundamentals are still favoring gold bears.

The bright metal delivered a poor performance on Tuesday as investors started discounting an extreme hawkish tone from the Federal Reserve (Fed) in its June interest rate decision announcement. No one could deny the fact that the inflation ghost has created havoc for the households. Rising price pressures are hurting their real income and a sudden meeting between Fed chair Jerome Powell and US President Joe Biden has indicated loud and clear that the inflation ghost is for real and will stay a little longer.

On the dollar front, the US dollar index (DXY) is consolidating below 102.00 as investors are awaiting the release of the ISM Manufacturing PMI. The economic data is seen at 54.5 against the prior print of 55.4. An outperformance from the economic catalyst will bolster the DXY.

Gold technical analysis

The breakdown of the Symmetrical Triangle on an hourly scale indicates the dominance of the bears. The ascending triangle of the above-discussed chart pattern is placed from May 20 low at $1,832.41 while the descending trendline is plotted from May 24 high at $1,869.75. The widening gap between 20- and 50- period Exponential Moving Averages (EMAs) at $1,841.00 and $1846.20 respectively will infuse fresh blood into the greenback bulls. The Relative Strength Index (RSI) (14) is oscillating in a bearish range of 20.00-40.00, which indicates more downside ahead.

Gold hourly chart

XAU/USD

Overview
Today last price	1837.38
Today Daily Change	0.02
Today Daily Change %	0.00
Today daily open	1837.36

Trends
Daily SMA20	1846.82
Daily SMA50	1897.41
Daily SMA100	1887.86
Daily SMA200	1840.42

Levels
Previous Daily High	1857.2
Previous Daily Low	1835.17
Previous Weekly High	1869.75
Previous Weekly Low	1840.85
Previous Monthly High	1909.83
Previous Monthly Low	1786.94
Daily Fibonacci 38.2%	1843.59
Daily Fibonacci 61.8%	1848.78
Daily Pivot Point S1	1829.29
Daily Pivot Point S2	1821.21
Daily Pivot Point S3	1807.26
Daily Pivot Point R1	1851.32
Daily Pivot Point R2	1865.27
Daily Pivot Point R3	1873.35

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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