Gold Price Forecast: XAU/USD eases below $1,800 on sluggish markets ahead of Fed’s verdict

• Gold price stays pressured around intraday low as it snaps four-day uptrend.
• Cautious mood ahead of the key data/events favor US Dollar buyers amid an easy start to the key week.
• XAU/USD bears need validation from the US CPI, Fed hawks.

Gold price (XAU/USD) remains depressed around $1,785 as it pushes back the bulls after a four-day winning streak during early Monday in Europe. The yellow metal’s latest losses, despite being mild, could be linked to the US Dollar’s recovery. However, a lack of major data/events on Monday challenges the bullion sellers.

That said, the US Dollar Index (DXY) prints 0.20% intraday gains around 105.20 by the press time. In doing so, the greenback’s gauge versus the six major currencies rises for the second consecutive day.

The DXY defied a two-day downtrend on Friday after upbeat figures from the US Producer Price Index (PPI) and the University of Michigan’s (UoM) Consumer Sentiment Index for November and December respectively. Also likely to have favored the greenback bulls could be the recently firmer inflation expectations that underpin the hawkish bets on the Federal Reserve’s (Fed) next move. Additionally, fears of global recession and the traditional safe-haven status also underpin the US Dollar’s run-up of late.

It should be noted that the recent economic optimism surrounding China, one of the biggest consumers of Gold, joins the doubts over the Fed’s further hawkish bias to challenge the XAU/USD bears.

Recently, CNBC quotes the Mastercard official as it said, “Inflation has already peaked, but it will remain above pre-Covid levels in 2023, said David Mann, chief economist for Asia-Pacific, Middle East and Africa at the Mastercard Economics Institute.”

The rising inflation fears favor a hawkish bias from the Fed and keep the Gold bears hopeful ahead of Tuesday’s US Consumer Price Index (CPI) and Wednesday’s Federal Open Market Committee (FOMC) meeting.

Gold price technical analysis

Gold’s pullback from a seven-day-old horizontal resistance area surrounding $1,805 joins downward-sloping RSI (14) line, not oversold, to favor XAU/USD bears.

That said, the sellers presently aim for the $1,783-84 support confluence including the 100-Hour Moving Average (HMA), 200-HMA and an ascending trend line from November 28.

However, any further downside needs validation from $1,766 before directing the Gold bears toward the late November swing low surrounding $1,721.

Meanwhile, an upside clearance of the stated horizontal resistance zone near $1,805 should stay beyond the monthly high of $1,810 to keep the Gold buyers on the table.

Following that, a run-up towards the tops marked in June around $1,857 and the $1880 can’t be ruled out.

Gold price: Hourly chart

Trend: Further downside expected