The gold price (XAU/USD) is maintaining its position above the psychological support level of $1,800.00. As the US dollar index (DXY) has regained moderately, the precious metal is falling steadily and is predicted to continue under the control of bearish. Given the price activity, gold prices are anticipated to breach $1,800.00, at which point the bears will reveal their real colors.
Traders should recognize that Federal Reserve (Fed) chair Jerome Powell’s remarks at the ECB’s annual Forum on Central Banking have supported the DXY for an extended length of time. Fed Powell stated that the Fed will employ quantitative tools to bring the inflation rate to 2 percent, but there is no assurance that this will occur. This suggests that investors should begin to accept that higher interest rates are here to stay and that Fed head Jerome Powell’s term will be fraught with difficulties and obstacles.
In today’s session, the focus will continue on the Purchase Managers Index (PMI) data from the US Institute of Supply Management (ISM). According to the preliminary estimates of 55 vs the previously announced 56.1, market players anticipate an underperformance.
On an hourly basis, gold prices are on the approach of breaking below Thursday’s $1802.79 low, which will trigger the falling triangle formation and push the precious metal downward. The decline of the 20-period and 50-period Exponential Moving Averages (EMAs) to $1,809.23 and $1,814.00, respectively, contributes to the negative filtering. The Relative Strength Index (14) has fallen below 40.00, indicating a forthcoming bearish impulsive wave.