Gold Price Forecast: XAU/USD sees a downside below $1,800 as Fed looks set to raise rates above 5%

Gold price is expected to continue its four-day losing streak amid hawkish Fed bets.
Investors should be prepared for a surprise rise in US Durable Goods Orders as the households' demand has accelerated lately.
Gold price is trading in a Falling Channel chart pattern in which every pullback is considered a selling opportunity.

Sagar Dua FXStreet

Gold price (XAU/USD) is demonstrating a topsy-turvy auction around $1,810.00 in the Asian session. The precious metal is expected to continue its four-day losing streak after surrendering the immediate support of $1,809.00 as Federal Reserve (Fed) policymakers see interest rates above 5% after January’s hot inflation data..

Cleveland Fed Bank President Loretta Mester cited “Will need to go above 5% funds rate, stay there for a while.” He further added, “Data shows inflation not yet on trend to get back sustainably to 2% target.”

An escalation in the United States Personal Consumption Expenditure (PCE) price index by 0.6% in January has cleared that it would be early announcing victory for the battle against inflation. A strong labor cost index has propelled consumer spending, which could result in a recovery in the Producer Price Index (PPI) ahead.

The US Dollar Index (DXY) is struggling to continue the upside move toward the 105.00 resistance. S&P500 futures are showing nominal gains after a bearish Friday, portraying a sheer drop in the risk appetite of the market participants. The return delivered on 10-year US Treasury bonds has dropped marginally below 3.94%.

Going forward, the Gold price will display action post the release of the US Durable Goods Orders (Jan) data. The street is expecting a contraction of 4% lower than the expansion of 5.6% released earlier. Investors should be prepared for a surprise rise as the households' demand has accelerated lately.

Gold technical analysis

Gold price is trading in a Falling Channel chart pattern in which every pullback is considered as a selling opportunity before a reversal move. The yellow metal is expected to find resistance around $1,820.00 after a minor pullback move.

The 50-period Exponential Moving Average (EMA) at $1,833.80 is acting as a major barricade for the Gold bulls.

The Relative Strength Index (RSI) (14) is oscillating in the bearish range of 20.00-40.00, which advocates further downside.

Gold hourly chart

XAU/USD

Overview
Today last price	1813.36
Today Daily Change	2.42
Today Daily Change %	0.13
Today daily open	1810.94

Trends
Daily SMA20	1864.16
Daily SMA50	1865.35
Daily SMA100	1792.35
Daily SMA200	1776.01

Levels
Previous Daily High	1827.87
Previous Daily Low	1808.99
Previous Weekly High	1847.59
Previous Weekly Low	1808.99
Previous Monthly High	1949.27
Previous Monthly Low	1823.76
Daily Fibonacci 38.2%	1816.2
Daily Fibonacci 61.8%	1820.66
Daily Pivot Point S1	1804
Daily Pivot Point S2	1797.05
Daily Pivot Point S3	1785.12
Daily Pivot Point R1	1822.88
Daily Pivot Point R2	1834.81
Daily Pivot Point R3	1841.76

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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