Gold Price Forecast: XAU/USD reverses intraday losses from $1630, US Durable Goods Orders buzz

Gold price (XAU/USD) has recovered the major portion of the losses recorded in the Tokyo session. The precious metal declined sharply to near $1,630.00 but recovered firmly and is indicating a formation of buying tail, which indicates a strong responsive buying structure. The yellow metal is attempting to shift into the prior balanced area placed in a narrow range of $1,640.00-1,649.06.

Meanwhile, the US dollar index (DXY) moved sharply to 114.52 as the risk profile turned sour on China’s leader Xi Jinping's house arrest and the Russian Federation’s warning of a nuclear attack in retaliation to western sanctions. The G-7 cartel is aiming to cripple the Russian economy by enforcing a spree of western sanctions so that that trading structure could get demolished.

The firmer move by the DXY towards 114.52 has also picked offers too ahead of US Durable Goods Orders data. As per the consensus, the economic data will decline by 1.1% against the prior decline of 0.1%. The impact will mainly come from weaker demand for gasoline and a 20 basis point (bps) decline in the headline Consumer Price Index (CPI) in the August reading.

Gold technical analysis

On an hourly scale, the gold prices are attempting to hit the 20-period Exponential Moving Average (EMA) at $1,650.54. If the precious metal manages to overstep the 20-EMA, it will find major barricades around the horizontal resistance placed from September 16 low at $1,654.41.

The Relative Strength Index (RSI) (14) is oscillating in a 20.00-40.00 range, which indicates that the downside momentum is still intact.

Gold hourly chart