- Gold price is expected to find bids around $1,650.00 followed by a conclusion of the corrective move.
- It seems that the DXY has made an immediate top as the Fed will trim the rate hike pace.
- The annualized US GDP may display de-growth by 0.6% consecutively.
Gold price (XAU/USD) is experiencing a healthy correction in the Tokyo session after witnessing a bumper rally. The precious metal is expected to find significant bids around the immediate cushion of $1,650.00 as the downside bias is not backed by momentum. So after the conclusion of the pullback move, the bright metal will resume its upside journey.
The rationale behind the mild correction in the gold prices is the less-confident pullback in the US dollar index (DXY). The DXY plunged after failing to sustain above the critical hurdle of 144.50. For the time being, the DXY’s top is in sight parallel to the interest rates peak at 4.6% guided by the Federal Reserve (Fed).
It is worth noting that Fed’s interest rate peak is not far from current interest rates at 3.-3.325% after a scrutiny of the ongoing velocity of hiking interest rates. The Fed is expected to maintain the terminal rate at 4.6% for a longer period till it finds a slowdown in the price pressures for several months.
On Thursday, investors will keep the US Gross Domestic Product (GDP) data on their radar. Considering the preliminary estimates, the annualized US GDP will continue its de-growth pattern for this quarter by 0.6%.
Gold technical analysis
Gold prices are declining towards the horizontal support placed from Monday’s high at $1,649.83 on an hourly scale. The precious metal is declining gradually, therefore, it is expected to capitalize on the above-mentioned horizontal support. This will indicate a change in polarity and the bright metal will display a firmer impulsive move.
The yellow metal is holding above the 50-period Exponential Moving Average (EMA) at $1,641.58, which indicates that the short-term uptrend is intact. While the bright metal has slipped below the 200-EMA at $1,655.00 but is expected to recapture it sooner.
Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a bullish range of 60.00-80.00, which indicates more upside ahead. Also, the momentum oscillator may find support at 60.00.
Gold hourly chart
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