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.

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

 

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD steadies near 1.0550, looks to post modest weekly gains

EUR/USD has lost its bullish momentum after having climbed above 1.0570 with the initial reaction to the US data in the American session and retreated toward the mid-1.0500s. On a weekly basis, the pair remains on track to close in positive territory. 

EUR/USD News

GBP/USD struggles to hold above 1.2300

GBP/USD struggles to hold above 1.2300

GBP/USD has edged lower following a jump above 1.2300 in the early American session on Friday. The market mood remains upbeat ahead of the weekend with Wall Street's main indexes posting strong daily gains on upbeat US data. 

GBP/USD News

Gold stays below $1,830 as US yields edge higher

Gold stays below $1,830 as US yields edge higher

Gold continues to fluctuate below $1,830 on Friday and looks to close the second straight week in negative territory. Fueled by the risk-positive market environment, the benchmark 10-year US Treasury bond yield is up more than 1% on the day, limiting XAU/USD's upside.

Gold News

Why Cardano could surprise over the weekend

Why Cardano could surprise over the weekend

ADA  set to close out the week with a gain on the workday trading week and over the weekend? Central banks signaled that the rate hike cycle is ending, meaning less stress and tight conditions for trading, opening up room for some upside potential with Cardano set to pop above $0.55 and test a significant cap.

Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures