Gold Price Forecast: XAUUSD struggles above $1,900 as USD bounces ahead US PCE inflation

  • Gold Price is fading its recovery from two-month lows as the US dollar regains poise.
  • The DXY is driving higher on an adrenaline rush from uncertainty over the rate decision by the Fed.
  • Apart from the interest rate decision, balance sheet reduction and further guidance will be in focus.

Gold Price is struggling to hold its recovery from over two-month lows of $1,972, as sellers continue to lurk above the $1,900 mark. The pullback in Gold Price comes on the back of a modest rebound seen in the US dollar across its major peers, as the market mood turns cautious amid worries over the tech stocks outlook following disappointing results from Amazon and Apple Inc. late Thursday. Meanwhile, concerns over a contraction in the US Q1 GDP keep investors unnerved, keeping the safe-haven demand for the greenback underpinned. Uncertainty over the Russia-Ukraine crisis, as well as, China’s covid resurgence and its fallout on the global growth will also likely prompt traders to seek refuge in the US currency.

Given the off in Japan, inactive bond yields seemed to have triggered the DXY’s pullback. On the same line is the cautious mood ahead of the Fed’s preferred inflation gauge, namely the US Core Personal Consumption Expenditures Price Index. Forecasts suggest the US Core PCE inflation data ease to 5.3% YoY versus 5.4% prior, which in turn may add to the pullback moves of the US dollar if easing more than expected.

Also read: Gold hit all downside targets as far as best support for this week at 1879/75 [Video]

In addition to the US PCE Price Index, US Michigan Consumer Sentiment Index and Chicago PMI will join the risk catalysts to direct short-term Gold Price moves.

Gold technical analysis

Gold Price extends rebound from the 100-DMA level, surroudning $1,877 by the press time. The recovery moves, however, need validation from the early month’s swing low near $1,915.

On a four-hour scale, XAUUSD is bid around the supply zone placed in a narrow range of $1,890.21-1,895.15. The asset is facing barricades near the 20-period Exponential Moving Average (EMA) at $1,898.10. While the downward trending 50-EMA at $1,917.90 is still advocating bears. The Relative Strength Index (RSI) (14) is attempting a range shift from 20.00-40.00 to 40.00-60.00, which could signal a short-lived reversal.

Gold four-hour chart

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