Gold Price Forecast: XAU/USD still inside the woods, $1,730 a key support

Gold price (XAU/USD) has established below $1,740.00 but is still inside the woods. The precious metal is witnessing back-and-forth moves in a range of $1,730.73-1,752.49 from the past three trading sessions. The bright metal is displaying subdued performance and the volatility prior to the release of the US Consumer Price Index (CPI) is expected to drag the asset below the critical support of $1,730.00.

As per the market consensus, the plain-vanilla CPI is seen minutely higher at 8.7% than the prior release of 8.6%. However, the core CPI that excludes food products and oil prices may drop to 5.7% vs. 6% reported earlier. This signifies that durable goods, automobiles, and other commodities are displaying the impact of policy restrictive measures, which have adopted by the Federal Reserve (Fed) earlier. However, the volatile food and fossil fuels are still not responding.

Meanwhile, the US dollar index (DXY) printed a fresh 19-year high at 108.27 on Monday amid a souring market mood. Escalating odds for one more bumper rate hike by the Fed are bolstering the case for lower earnings by the corporate.  The unavailability of cheap money in the economy has forced the corporate sector to put an extra lens on investment opportunities.

Gold technical analysis

On an hourly scale, the gold prices are on the verge of giving a downside break of the consolidation formed in a $1,730.73-1,752.49 range. The 20- and 50-period Exponential Moving Averages (EMAs) at $1,737.04 and $1,740.86 respectively have started declining, which adds to the downside filters. Also, the Relative Strength Index (RSI) (14) is looking to surrender the cushion of 40.00 to add volatility to the counter.

Gold hourly chart