Gold Price Forecast: XAU/USD steadies around $1,850 as DXY baffles on stable US inflation ahead


  • Gold price is struggling to hold itself above $1,850.00 ahead of US inflation.
  • Firmer US NFP and inflation expectations are compelling for a 50 bps rate hike next week.
  • An Ascending Triangle formation is indicating a consolidation ahead.

Gold price (XAU/USD) is displaying back and forth moves in the Asian session. The precious metal is oscillating in a $2 range after a pullback move from Tuesday’s high at $1,855.64. The mega event of the US inflation this week is going to insert extreme volatility in the FX domain as May inflation figures will have a significant impact on the stance to be adopted by the Federal Reserve (Fed) next week.

Considering the upbeat US Nonfarm Payrolls and above 8% annual inflation figure, Fed chair Jerome Powell may dictate an aggressive interest rate policy. No doubt, higher price pressures are eating the paychecks of households in the US, which seeks exclusive attention from the Fed. Therefore, a consecutive rate hike announcement of 50 basis points (bps) by Fed Powell will be an optimal decision to keep up the fight against inflation.

Meanwhile, the US dollar index (DXY) is facing barricades around its critical resistance at 102.48.  A rebound in the positive market sentiment on Tuesday trimmed the DXY’s appeal and underpinned the risk-perceived currencies. For an upside move, the DXY needs to violate Tuesday’s high at 102.84.

Gold technical analysis

On a four-hour scale, XAU/USD is trading in an Ascending Triangle chart pattern whose upward sloping trendline is placed from May 16 low at $1,786.94 while the horizontal resistance is plotted from May 24 high at $1,869.69. The 21-period Exponential Moving Average (EMA) at $1,850.00 is overlapping with the gold prices, which signals a consolidation ahead. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range, which confirms topsy-turvy moves in upcoming sessions.

Gold four-hour chart

XAU/USD

Overview
Today last price 1847.64
Today Daily Change -4.72
Today Daily Change % -0.25
Today daily open 1852.36
 
Trends
Daily SMA20 1843.06
Daily SMA50 1888.52
Daily SMA100 1889.38
Daily SMA200 1841.65
 
Levels
Previous Daily High 1855.59
Previous Daily Low 1837.11
Previous Weekly High 1874.16
Previous Weekly Low 1828.55
Previous Monthly High 1909.83
Previous Monthly Low 1786.94
Daily Fibonacci 38.2% 1848.53
Daily Fibonacci 61.8% 1844.17
Daily Pivot Point S1 1841.12
Daily Pivot Point S2 1829.87
Daily Pivot Point S3 1822.64
Daily Pivot Point R1 1859.6
Daily Pivot Point R2 1866.83
Daily Pivot Point R3 1878.08

 

 

 

 

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