Gold Price Forecast: XAU/USD sees no decisive bets at open on triangle formation

• Gold price may hover below $1,900 as investors will focus on US inflation.
• Higher US NFP has bolstered the odds of a jumbo rate hike in June.
• US inflation is seen lower at 8.1% against the prior print of 8.5%.

Gold Price (XAU/USD) is expected to open flat on Monday and will likely perform lackluster on galloping catalysts that favor a rate hike by the Federal Reserve (Fed) in June. Inflation will persist longer on account of higher fossil fuel prices and costly commodities due to the multiplier effects of helicopter money and the Russia-Ukraine war. Now, the upbeat US Nonfarm Payrolls (NFP) has reinforced the chances of a jumbo rate hike by the Fed in June.

The US central bank elevated its interest rate by 50 basis points (bps) in May to tame the multi-decade inflation. Now, solid job additions in the US economy at 428k, much higher than the consensus of 391k have bolstered one more 50 bps rate hike in June. The Unemployment Rate remained unchanged at 3.6%, and according to the report, it was led by gains in leisure, hospitality, manufacturing, transportation, and warehousing.

It looks possible that a tight labor market will raise the Labor Price Index and higher earnings by the household will lead to a much higher inflation print in the US economy and eventually will impact the gold prices.

This week, the US inflation will remain in focus, which is expected to land at 8.1% against the prior print of 8.5% on yearly basis. A lower inflation print may dent the odds of a jumbo rate hike but broad-based inflation is still higher, which demands one more mega rate hike.

Gold technical analysis

The precious metal is forming a symmetrical triangle chart pattern on an hourly scale, which signals indecisiveness in the sentiments of the market participants. The 20-period Exponential Moving Average (EMA) at $1,882.16 is overlapping with prices, which signals a consolidation ahead. Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which advocates a directionless move.

Gold hourly chart