Gold Price Forecast: XAU/USD struggles around $1,860, upside looks likely on weak DXY
- Gold price is oscillating around $1,860.00 amid broader weakness in the DXY.
- The market participants are dumping the DXY on lower US NFP forecasts.
- A formation of a Symmetrical Triangle is indicating a consolidation move going forward.
Gold price (XAU/USD) has witnessed a strong rebound after failing to sustain below the round level support of $1,850.00 in early Tokyo. The precious metal has touched an intraday high of $1,860.25 and is expected to refresh the day’s high as an improvement in the risk appetite of the market participants has diminished the US dollar index (DXY)’s appeal.
A slippage in the DXY could be tagged to lower forecasts of the US Nonfarm Payrolls (NFP), which are due later this week. A preliminary estimate for the US NFP is 310k against the prior print of 428k last month. This dictates an expectation of a more than 27% fall in the number of job additions by the US economy. A slippage in the additional jobs creation data could trim the extent of hawkishness in the stance of the Federal Reserve (Fed) in its June monetary policy. And, eventually, it will underpin the gold prices.
Also, the US economic calendar is offering the release of the ISM Manufacturing PMI data, which may slip to 54.5 against the prior print of 55.4.
Gold technical analysis
A formation of a Symmetrical Triangle on an hourly scale is indicating a slippage in the volatility, which will be followed by a breakout in the same. The gold prices are expected to break on the upside amid a golden cross of 50- and 200-period Exponential Moving Averages (EMAs) at $1,837.42. The Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates a consolidation ahead.
Gold hourly chart
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.
