Gold Price Forecast: XAU/USD sees exhaustion around $1,820 after a downside move, DXY skids


  • Gold price is expected to rebound as a retest of Wednesday’s low shows a loss of downside momentum.
  • The hawkish commentary from Fed Powell has put the gold prices on tenterhooks for a prolonged period.
  • The DXY is performing lackluster on the downbeat US PMI.

Gold price (XAU/USD) is hoping for a rebound as the gold bears are indicating a loss of momentum after testing Wednesday’s low around $1,820.00. The precious metal is oscillating in a narrow range of $1,822.67-1,825.47 from the late New York session and is now showing some signs of an upside break of the rangebound move.

The commentary from Federal Reserve (Fed) chair Jerome Powell’s testimony that the central bank is ‘unintentionally committed’ to bringing price stability in the US economy has kept the gold prices on the tenterhooks. To achieve the targeted inflation rate, the Fed is needed to elevate interest rates quickly. Comparing the current inflation rate with the targeted one, the former is at least four times of the latter.

Meanwhile, the US dollar index (DXY) is expecting a downside move on displaying underperformance on the Purchase Managers Index (PMI) front. The Manufacturing PMI landed at 52.4 much lower than forecasts and the prior print of 56 and 57 respectively. Also, the Services PMI slipped sharply to 51.6 from the consensus of 53.5 and the prior print of 53.4.

Gold technical analysis

On a broader note, the gold prices are displaying topsy-turvy moves in a range of $1,821.72-1,847.95. The 20- and 50-period Exponential Moving Averages (EMAs) at $1,828.30 and $1,831.58 respectively are scaling lower, which strengthens a downside bias. Meanwhile, the Relative Strength Index (RSI) (14) is displaying signs of momentum loss on the downside. The momentum oscillator is gauging support around 40.00 levels.

Gold hourly chart

XAU/USD

Overview
Today last price 1824.98
Today Daily Change 2.20
Today Daily Change % 0.12
Today daily open 1822.78
 
Trends
Daily SMA20 1843.36
Daily SMA50 1864.23
Daily SMA100 1891.73
Daily SMA200 1843.72
 
Levels
Previous Daily High 1846.15
Previous Daily Low 1822.59
Previous Weekly High 1879.26
Previous Weekly Low 1805.11
Previous Monthly High 1909.83
Previous Monthly Low 1786.94
Daily Fibonacci 38.2% 1831.59
Daily Fibonacci 61.8% 1837.15
Daily Pivot Point S1 1814.86
Daily Pivot Point S2 1806.95
Daily Pivot Point S3 1791.3
Daily Pivot Point R1 1838.42
Daily Pivot Point R2 1854.07
Daily Pivot Point R3 1861.98

 

 

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