Gold Price Forecast: XAU/USD to consolidate below $1,860 as investors await Fed’s Powell

Gold price may witness a pullback towards $1,840.00 ahead of Fed Powell.
The soaring market mood is responsible for the weakness in the DXY.
To corner the galloping inflation, a jumbo rate hike in June looks likely.

Sagar Dua FXStreet

Gold price (XAU/USD) has delivered a four-day winning streak after displaying a bullish reversal at around $1,800.00 last week. The precious metal is expected to turn sideways after a firmer responsive buying action as more market participants will connect with bulls for further upside.

A softer US dollar index (DXY) is the real catalyst behind the $40+ rally in gold prices. The DXY has eased around 2.80% after hitting a high of 105.00 despite rising odds of a 50 basis point (bps) interest rate hike by the Federal Reserve (Fed) in June. Mounting inflationary pressures in the US economy are compelling for one more rate hike by the Federal Reserve (Fed) in June. Also, the speech from Fed chair Jerome Powell on Tuesday may provide some insights into the likely monetary policy action in June.

The upbeat market tone is responsible for a sheer downside move in the DXY. Risk-sensitive currencies are gaining traction as DXY’s safe-haven appeal diminishes.

Gold technical analysis

On an hourly scale, XAU/USD is holding above 23.6% Fibonacci retracement (placed from April 18 high at $1,998.43 to May’s low at $1,804.90) at $1,837.60. Gold bulls are firmer above the 200-period Exponential Moving Average (EMA) at $1,840.40. The trendline placed from May’s low at $1,804.90 will act as major support for the counter. A pullback move is expected towards the above-mentioned trendline after a bullish reversal to near $1,840.00. The Relative Strength Index (RSI) (14) has shifted lower from the bullish range of 60.00-80.00 but is expected to find support at 40.00.

Gold hourly chart

XAU/USD

Overview
Today last price	1853.54
Today Daily Change	6.94
Today Daily Change %	0.38
Today daily open	1846.6

Trends
Daily SMA20	1858.85
Daily SMA50	1909.57
Daily SMA100	1884.56
Daily SMA200	1838.11

Levels
Previous Daily High	1849.45
Previous Daily Low	1832.41
Previous Weekly High	1849.45
Previous Weekly Low	1786.94
Previous Monthly High	1998.43
Previous Monthly Low	1872.24
Daily Fibonacci 38.2%	1842.94
Daily Fibonacci 61.8%	1838.92
Daily Pivot Point S1	1836.19
Daily Pivot Point S2	1825.78
Daily Pivot Point S3	1819.15
Daily Pivot Point R1	1853.23
Daily Pivot Point R2	1859.86
Daily Pivot Point R3	1870.27

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.

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