GOLD PRICE FORECAST: XAU/USD TUMBLES TO NEAR $1,850 AS DXY REBOUNDS, US PPI EYED

• Gold price has frozen in a $1,850.00s area amid a rebound in the DXY.
• The US PPI is seen lower at 10.7% against the prior print of 11.2%.
• The precious metal is trading below the 61.8% Fibo retracement.

Gold Price (XAU/USD) has slipped to near $1,852.00 as the US dollar index (DXY) has rebounded sharply after trading lackluster in the early Tokyo session. The precious metal is wandering in a minute range on Thursday and is expected to trade directionless ahead of the US Producer Price Index (PPI).

The US PPI is seen at 10.7% against the print of 11.2%, recorded a year ago. While the core PPI that excludes food and energy is expected to land at 8.9% lower than the prior figure of 9.2%.

Lately, higher US Consumer Price Index (CPI) numbers have bolstered the odds of a bumper rate hike by the Federal Reserve (Fed). The upbeat US CPI at 8.3% in comparison with the consensus of 8.1% has strengthened the chances of a rate hike by 75 basis points (bps) in June monetary policy.

Meanwhile, the US dollar index (DXY) has rebounded sharply above 104.00 as investors are awaiting an outperformance from the US PPI.

GOLD TECHNICAL ANALYSIS

On the daily scale, XAU/USD is trading below 61.8% Fibo retracement (placed from 15 December 2021 low at $1,753.01 to March 8 high at $2,070.54) at $1,875.00. The 50- and 200-period Exponential Moving Averages (EMAs) at $1,902.95 and $1,887.24 respectively have turned lower, which adds to the downside filter. Meanwhile, the Relative Strength Index (RSI) (14) has shifted into a bearish range of 20.00-40.00, which signals more downside.

Gold daily chart