Gold Price Forecast: XAU/USD to kiss $1,660 in no time amid vulnerable DXY, PMIs grab focus
- Gold price is advancing towards $1,660 amid an upbeat market mood.
- A Fed policymaker adopted a less-hawkish approach to interest rate guidance.
- The returns on 10-year US bonds have trimmed to 2.20% amid a decline in hawkish Fed bets.
Gold price (XAU/USD) is marching towards the immediate hurdle of $1,660.00 sharply as the positive market sentiment witnessed on Friday is expected to continue further. The precious metal picked significant bids around the two-year low at $1,614.85 and displayed a juggernaut rally, which may advance further.
The risk-on impulse shot vigorously after the Federal Reserve (Fed) policymaker supported a slowdown in the current pace of hiking interest rates to avoid sending the economy into an ‘unforced downturn’. San Francisco Fed President Mary Daly cited that too sharp increment in interest rates has trimmed the consensus for growth prospects. Therefore, a slowdown in the rate hike pace would lift some pressure on the economy. A less-hawkish commentary from a Fed policymaker in a very long time lifted the market sentiment and the S&P500 soared by more than 2.60%.
Meanwhile, the US dollar index (DXY) displayed a vertical fall and settled below the 112.00 cushion. The 10-year benchmark US Treasury yields declined to 4.22% as chances for a 75 basis point (bps) rate hike by the Fed have trimmed to 88%.
On Monday, investors will focus on the release of the S&P PMIs data. The Manufacturing PMI is expected to decline to 51.2 vs. the prior release of 52.0 while the Services PMI may drop to 49.2 from 49.3 reported earlier.
Gold technical analysis
Gold price has witnessed a stellar buying interest after testing the demand zone placed in a $1,614.85-1,621.60 range. The precious metal has crossed the 50-and 200-Exponential Moving Averages (EMAs) at $1,637.50 and $1,660.00 respectively in no time, which signals the strength of the gold bulls.
Also, the Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates more upside 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.
