Gold Price Forecast: XAU/USD drops back to near $2,030 as US Inflation comes into picture

• Gold price has slipped back to near $2,030.00 as investors have shifted their focus back to US inflation.
• US CPI has regained the spotlight as US debt ceiling negotiations have adjourned till Friday.
• No raise in the debt ceiling is not an option as it would result in a default of obligated payments.

Gold price (XAU/USD) has sensed some pressure while attempting to surpass the immediate resistance of $2,040.00 in the Asian session. The precious metal is facing difficulties in attracting bids as investors are worried that an expression of persistence in the United States Consumer Price Index (CPI) will force the Federal Reserve (Fed) to return to a hawkish policy stance.

S&P500 futures are showing modest gains in Tokyo, portraying ease in the overall risk aversion theme. The US Dollar Index (DXY) has turned sideways around 101.55 as investors are shifting their focus toward the inflation data after knowing that US debt ceiling negotiations have adjourned till Friday.

Considering the current statements from US President Joe Biden and Speaker McCarthy, a bipartisan agreement is expected as the former wants to approve the debt-ceiling rate without sacrificing the scale of spending initiatives and the latter is not interested in approving the default. And, the important aspect is no raise in the debt ceiling is not an option as it would result in a default of obligated payments.

On the US economic data front, investors are anticipating that April’s monthly headline and core inflation accelerated by 0.4%. This could renew fears of a rebound in the inflationary pressures. It may create more troubles for the Fed as more rate hikes would push the economy into recession.

Gold technical analysis

Gold price is facing barricades from the intermediate resistance plotted around $2,040.00. On a broader note, the pre4cious metal is auctioning in a Rising Channel chart pattern on a four-hour scale. The upper portion of the aforementioned chart pattern is placed from March 20 high at $2,009.88 while the lower portion is plotted from March 22 low at $1,934.34.

The 20-period Exponential Moving Average (EMA) at $2,027.58 might continue to perform as a cushion for the Gold bulls.

Meanwhile, the Relative Strength Index (RSI) (14) has sensed pressure while shifting into the bullish range of 60.00-80.00.

Gold four-hour chart