Gold Price Forecast: XAU/USD loses battle from $1820 as focus shifts to US Core PCE

• Gold price is establishing below $1,820.00 on hawkish commentary from Western central banks.
• The DXY is aiming to recapture its 19-year high as US PCE has climbed to 7.1%.
• The precious metal is hovering around the lower portion of the Descending Triangle.

Gold price (XAU/USD) has turned sideways after displaying wild swings in the New York session. The precious metal is oscillating in a narrow range of $1,814.96-1,819.13 after reversing its gains. The speech from Federal Reserve (Fed) chair Jerome Powell brought a sense of volatility in the gold prices and his hawkish commentary was committed to bringing price stability to the US economy.

Investors should start discounting a consecutive rate hike of 75 basis points (bps) as accelerating inflation has become invincible for the US households and they have to face its consequences. The comments from European Central Bank (ECB) President Christine Lagarde that returning to a lower inflation rate is not possible now. The commentary spooked the FX arena and risk-sensitive currencies took a hit.

Meanwhile, the US dollar index (DXY) is aiming to recapture its 19-year high at 105.79 on an improvement in US Personal Consumption Expenditure on a quarterly basis.  The US PCE landed at 7.1% from the prior print of 7%. No wonder, the improvement in PCE must bank upon higher prices rather than higher demand.  Going forward, the focus will remain on the Core PCE Price Index, which may decline to 4.7% from the prior print of 4.9% on an annual basis.

Gold technical analysis

The gold prices are trading near the potential support of the Descending Triangle pattern. The downward sloping trendline of the above-mentioned chart pattern is plotted from June 16 high at $1,857.58 while the horizontal support is placed from June 16 low at $1,815.73. The 20-period Exponential Moving Average (EMA) at $1,819.36 is acting as a major resistance for the counter. Meanwhile, the Relative Strength Index (RSI) (14) is holding itself above 40.00 levels, however, a slippage below the same will bring more weakness in the bright metal.

Gold hourly chart