Gold Price Forecast: XAU/USD sees downside below $1,730 on upbeat DXY, US NFP in focus


  • Gold prices are likely to witness more downside on a firmer DXY.
  • Hawkish FOMC minutes have brought an intense sell-off in gold prices.
  • The US NFP is seen lower at 270k in relation to the prior release.

Gold price (XAU/USD) has turned into a consolidation phase after displaying a sheer downside move to near $1,732.00 in the New York session. On a broader note, the precious metal is in the grip of bears and possesses the downside potential if it violates the crucial support of $1,730.00.

The precious metal is attracting offers as the release of the Federal Open Market Committee (FOMC) minutes on Wednesday infused fresh blood into the US dollar index (DXY). The minutes were extremely hawkish as only one FOMC member was not in support of 75 basis points (bps) interest rate hike. Also, the Federal Reserve (Fed) is ‘unintentionally committed’ to bringing price stability and will elevate interest rates further to the same extent if high inflation persists further.

The DXY has refreshed its 19-year high at 107.26 and more gains are on the way ahead of the US Nonfarm Payrolls (NFP). A preliminary estimate for the economic data is 270k, lower than the prior print of 390k. 

Gold technical analysis                              

On the daily scale, the gold prices are declining towards the horizontal support placed on the 8 March 2021 low at $1,676.87. The 50- and 200-period Exponential Moving Averages (EMAs) have displayed a death cross at $1,850.00, which adds to the downside filters. Meanwhile, the Relative Strength Index (RSI) (14) has shifted into a bearish range of 20.00-40.00, which signals more downside ahead.

Gold daily chart

XAU/USD

Overview
Today last price 1739.26
Today Daily Change -25.51
Today Daily Change % -1.45
Today daily open 1764.77
 
Trends
Daily SMA20 1826.9
Daily SMA50 1842.86
Daily SMA100 1889.95
Daily SMA200 1845.81
 
Levels
Previous Daily High 1812.22
Previous Daily Low 1763.99
Previous Weekly High 1841.05
Previous Weekly Low 1784.55
Previous Monthly High 1879.26
Previous Monthly Low 1802.79
Daily Fibonacci 38.2% 1782.41
Daily Fibonacci 61.8% 1793.8
Daily Pivot Point S1 1748.43
Daily Pivot Point S2 1732.1
Daily Pivot Point S3 1700.2
Daily Pivot Point R1 1796.66
Daily Pivot Point R2 1828.56
Daily Pivot Point R3 1844.89

 

 

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