Gold Price Forecast: XAU/USD sees a downside towards $1,700 on lower consensus for US Inflation

Gold price is expected to drop to near $1,700.00 on a breakdown of Ascending Triangle.
Lower consensus for US CPI is resulting in a sell-off in the precious metal.
The headline US CPI is seen lower at 8.1% vs. 8.5% reported earlier.

Sagar Dua FXStreet

Gold price (XAU/USD) is witnessing a steep fall after refreshing intraday’s low at $1,712.96. The precious metal is facing a sell-off heat to lower consensus for the US Consumer Price Index (CPI). The yellow metal is expected to continue its vulnerable performance and will decline towards the psychological support of $1,700.00.

As per the market estimates, the US inflation will land at 8.1%, 40 basis points lower than the prior release. The households in the US economy are facing the headwinds of soaring price pressures for a prolonged time. They are forced higher payouts on similar quantities purchased. As gasoline prices have fallen dramatically and the rising interest rates by the Federal Reserve (Fed) have started doing their job perfectly now, price pressures are experiencing exhaustion signals.

It is worth noting that gold is considered an inflation-hedged asset and a lower consensus for inflationary pressures is forcing the market participants to ditch the yellow metal.

Meanwhile, the US dollar index (DXY) has turned sideways as a lower consensus for the headline CPI figure will force the Fed policymakers to trim their hawkish tone.

Gold technical analysis

Gold price has dropped below the Ascending Triangle pattern whose upward-sloping trendline is placed from Wednesday’s low at $1,694.31 while the horizontal resistance is August 31 high at $1,726.62. The 20-and 50-period Exponential Moving Averages (EMAs) are overlapping to each other, which indicates a sideways move ahead.

Also, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which supports a consolidation ahead.

Gold hourly chart

XAU/USD

Overview
Today last price	1713.08
Today Daily Change	-3.74
Today Daily Change %	-0.22
Today daily open	1716.82

Trends
Daily SMA20	1734.78
Daily SMA50	1743.86
Daily SMA100	1795.67
Daily SMA200	1833.55

Levels
Previous Daily High	1729.57
Previous Daily Low	1708.45
Previous Weekly High	1729.57
Previous Weekly Low	1691.47
Previous Monthly High	1807.93
Previous Monthly Low	1709.68
Daily Fibonacci 38.2%	1721.5
Daily Fibonacci 61.8%	1716.52
Daily Pivot Point S1	1706.99
Daily Pivot Point S2	1697.16
Daily Pivot Point S3	1685.87
Daily Pivot Point R1	1728.11
Daily Pivot Point R2	1739.4
Daily Pivot Point R3	1749.23

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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