Gold Price Forecast: XAU/USD sees more downside to near $1,820 ahead of Manufacturing PMI
Gold price (XAU/USD) has given a downside break from its previous consolidation formed in a $1,846.20-1,864.16 range in the New York session. The precious metal has turned extremely volatile as investors are bracing for a rise in the extent of the hawkish stance to be dictated by the Federal Reserve (Fed) in June.
Mounting inflationary pressures in the US economy have created havoc for the Fed and the US administration. To discuss the same, US President Joe Biden and Fed chair Jerome Powell conducted a meeting on Tuesday to discuss measures that could contain the soaring inflation. No matter what kind of measures the Fed will take to tame the price pressures, one thing is for sure the liquidity absorption program will get tightened further and the gold prices will remain on the tenterhooks.
Meanwhile, the US dollar index (DXY) is consolidating above 101.70 and is likely to witness an initiative buying action after a pullback. In today’s session, investors will focus on the ISM Manufacturing PMI, which is seen lower at 54.5 against the prior print of 55.4.
Gold technical analysis
A downside break of the Symmetrical Triangle on the hourly scale resulted in a volatility expansion that dragged the gold prices significantly lower. The breakdown of the precious metal will find a cushion at around $1,820.00. Declining 20- and 50-period Exponential Moving Averages (EMAs) at $1,846.00 and $1,850.00 are hinting at more downside. Along with this, the Relative Strength Index (RSI) (14) has shifted into a bearish range of 20.00-40.00, which adds to the downside filters.
Reference by: Investing.com
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