Gold Price Forecast: XAU/USD oscillates above $1,800 amid USD rebound, ahead of US ISM PMI

• Gold price is hovering above $1,800.00, downside looks likely as DXY rebounds.
• Fed Powell is unable to deliver any guarantee on bringing the inflation rate down to 2%.
• Investors are expecting an underperformance on the US ISM PMI front.

Gold price (XAU/USD) is holding itself above the psychological support of $1,800.00. The precious metal is declining gradually and is expected to remain in the grip of bears as the US dollar index (DXY) has rebounded modestly. Considering the price action, the gold prices are expected to violate $1,800.00 and the bears will show their true colors.

Traders should understand the fact that the commentary from Federal Reserve (Fed) chair Jerome Powell in his speech at ECB’s annual Forum on Central Banking has underpinned the DXY for a prolonged period. Fed Powell mentioned that the Fed will focus on returning the inflation rate at 2% by deploying the quantitative measures but there is no guarantee of that. This indicates that investors should start admitting that higher rates are for a prolonged period now and the employment tenure of Fed chair Jerome Powell will be full of troubles and challenges.

In today’s session, the spotlight will remain on the US Institute of Supply Management (ISM) Purchase Managers Index (PMI) data.  As per the preliminary estimates of 55 vs. 56.1 previously reported, an underperformance is expected by the market participants.

Gold technical analysis

On an hourly scale, the gold prices are on a verge of giving a downside break of Thursday’s low at $1802.79 which will activate the descending triangle formation and will drag the precious metal vertically lower. Declining 20- and 50-period Exponential Moving Averages (EMAs) at $1,809.23 and $1,814.00 respectively add to the downside filters. The Relative Strength Index (RSI) (14) has tumbled below 40.00, which signals a fresh bearish impulsive wave ahead.

Gold hourly chart