Gold Price Forecast: XAU/USD approaches $1,860 after a recovery move, spotlight is on US Inflation

• Gold price is looking to stretch its recovery move to near $1,860.00 amid a decline in safe-haven’s appeal.
• Rising expectations for a surprise rise in US inflation are not providing any cushion to yields.
• Fed Bowman sees a continuation of rate hikes, pointing out there will be a lot of data releases between now and the next policy meeting.

Gold price (XAU/USD) is marginally far from reclaiming the critical resistance of $1,860.00 in the Tokyo session. The precious metal recovered firmly after sensing buying interest around $1,850.00 as the US Dollar Index (DXY) surrendered the immediate support of 102.80. The further downside in the USD Index looks favored as the risk appetite of the market participants is extremely solid.

S&P500 futures are effectively recovering their minor losses, witnessed in the Asian session. Rising expectations for a surprise rise in the United States inflation is not providing any cushion to the US Treasury yields. The alpha delivered on 10-year US Treasury bonds has dropped below 3.70%.

Analysts at NBF expect “The energy component likely rebounded in the month, helping the headline index to advance 0.5%. If we’re right, the YoY rate should come down from 6.5% to 6.2%. The core index, meanwhile, may have continued to be supported by rising rent prices and advanced 0.3% on a monthly basis. This would translate into a three-tick decline of the 12-month rate to 5.4%.”

Despite a decline in the US Consumer Price Index (CPI), the Federal Reserve (Fed) won’t tone down its hawkish stance as the stubbornness in the inflationary pressures will take time in easing.

Fed Governor Michelle Bowman said on Monday the Fed will continue to raise interest rates, pointing out there will be a lot of data releases between now and the next policy meeting.

Gold technical analysis

Gold price has attempted a recovery move after sensing a loss in the downside momentum near $1,850.00. The momentum oscillator, Relative Strength Index (RSI) (14), has shown that the Gold price was making Lower Highs while the oscillators delivered Higher Lows. This indicates an absence of strength in the downside momentum.

Meanwhile, the Gold price is looking to shift its business above the 20-period Exponential Moving Average (EMA) at around $1,860.00. An occurrence of the same will strengthen the Gold bulls.

Gold two-hour chart