Gold Price Forecast: XAU/USD consolidates above 1,800, focus shift on US Retail Sales

• XAU/USD is balancing around $1,810.00 as DXY steadies ahead of US Retail Sales.
• Upbeat US NFP and inflation have strengthened the chances of a jumbo rate hike by the Fed in June.
• An establishment below the 200-EMA is advocating gold bears.

Gold Price (XAU/USD) displayed an extreme volatility contraction in the New York session on Friday amid a light economic calendar. The bright metal is expected to deliver similar performance and is hovering around $1,813.55, following the footprints of doldrums in the US dollar index (DXY).

The DXY witnessed a sheer fall on Friday after printing a fresh 19-year high of 105.00. Investors bent towards some profit-booking measures that dragged the asset lower to 104.50. The asset is consolidating around 104.50 and is seeing more downside on mounting selling pressure.

The precious metal has been through a period of high tides backed by the announcements of higher inflationary pressures last week and rising job additions in the labor force in the first week of May. This has bolstered the chances of a 50 basis point (bps) interest rate hike by the Federal Reserve (Fed) in June. To achieve price stability, the determination from the Fed may squeeze liquidity from the market at a much more rapid pace.  Now, investors are shifting their focus to the US Retail Sales, which are due on Tuesday. The monthly Retail Sales figure is expected at 0.7%, higher than the prior print of 0.5%.

Gold technical analysis

On the daily scale, XAU/USD has established below the 200-period Exponential Moving Average (EMA) at $1,856.65. The precious metal has been weakened after slipping below the trendline plotted from the 9 August 2021 low at $1,687.78. The Relative Strength Index (RSI) (14) has shifted into a bearish range of 20.00-40.00, which signals more pain ahead.

Gold daily chart