Gold Price Forecast: XAU/USD flirts with $1,850 even as DXY bounces off monthly low

• Gold prices consolidate recent gains amid a quiet Asian session.
• Inflation fears underpin the US dollar’s corrective pullback from monthly low after two-week downtrend.
• Hopes of firmer US employment figures, technical barriers also challenge bulls.
• Gold Weekly Forecast: Sellers stay on the sidelines as focus shifts to US data

Gold (XAU/USD) licks its wounds around $1,850, following a two-week rebound, as the US Dollar Index (DXY) pauses the latest pullback amid a sluggish Asian session on Monday.

That said, the US Dollar Index (DXY) prints 0.05% intraday gains around 101.68, bouncing off the monthly low of 101.43 flashed on Friday, as markets reassert Friday’s US data to forecast the Fed’s next moves.

On Friday, the US Personal Consumption Expenditure (PCE) data came in mixed for April, mostly downbeat, as the Core PCE Price Index, the Fed’s preferred measure of inflation, matched 4.9% YoY forecasts versus 5.2% prior. Further, Personal Income rose less than expected but the Personal Spending improved.

Following the data, traders cheered mixed data with a rush towards riskier assets and propelled the Wall Street benchmarks but kept the bond yields intact. It’s worth noting that the S&P 500 Future print mild gains but the US 10-year Treasury yields stay unchanged at 2.74% amid the US bank holiday.

Moving on, a light calendar and a bank holiday in the US may restrict gold’s immediate moves. However, risk catalysts will be important to watch for fresh impulse, which in turn highlight headlines from Russia and China.

Above all, this week’s US jobs report for April may also help the greenback gauge to pare the latest losses, amid hopes of firmer prints, which in turn could weigh on gold prices.

Technical analysis

Gold’s pullback from a two-week-old previous support line, around $1,865 by the press time, needs validation from the $1,845 support confluence, including the 50-SMA and 100-SMA. That said, the MACD flashes the bearish signals while the RSI remains downwardly sloped, not oversold, which in turn suggests room for further downside.

Gold: Four-hour chart

Trend: Further weakness expected