Gold Price Forecast: XAU/USD awaits acceptance above $1,870, focus on US consumer data

Gold price witnessed good two-way price action on Thursday, although maintained Wednesday’s post-US inflation data-induced higher side after finding some demand near $1,842. Growing inflation worries globally continue to boost gold’s appeal as an inflation hedge, despite the major central bankers’ dismissing higher prices as transitory. The upside in gold price, however, was limited by the relentless rise in the US dollar across its main rivals, as hotter inflation also brought back the Fed rate hike speculation on the table.  

On the final trading day of the week, gold price is duplicating the moves seen in Thursday’s Asian trading, as it retreats amid firmer dollar and yields. Although the narrative of mounting inflationary risks and their negative impact on the global economic growth will continue to bode well for the bullion. Covid resurgence in China and in parts of the Euro area boosts gold’s safe-haven appeal, as well. The end of the week flows during the London fix will be a cause for concerns for gold buyers. Meanwhile, the US Consumer Sentiment data will be also closely eyed for any impact on the dollar trades, which may eventually influence gold price.

Gold Price Chart - Technical outlook

Gold: Daily chart

Nothing seems to have changed on the short-term technical front, as gold price remains on track for the further upside on a sustained break above the June 16 highs of $1,869.

The next significant resistance is environed at the June 14 tops of $1,878, followed by the $1800 psychological level.

The 14-day Relative Strength Index (RSI) peeped briefly in the overbought zone a day before but has eased slightly thereafter, suggesting that a fresh upswing could be in the making.

On the downside, the $1,850 demand area will get tested initially, below which Thursday’s low of $1,843 will be on the sellers’ radars.

The previous critical resistance now support at $1,834 will hold the key for gold bulls.