Gold Price Forecast: XAU/USD eyes $1,850 amid bearish DXY, FOMC minutes in focus

• Gold price is likely to advance higher towards $1,850.00 amid broader weakness in the DXY.
• The odds of a jumbo rate hike by the Fed are progressing quickly.
• The DXY has surrendered more than 2% from its 19-year high.

Gold price (XAU/USD) is expected to carry forward its bullish move in the Asian session recorded on Friday. The precious metal delivered a strong rebound last week after sensing significant bids below the psychological support of $1,800.00. A gradual upside approach by the gold bulls was witnessed right from the initial response of the market participants.

The optimism came in the bright metal despite the progressing odds of a 50 basis point (bps) by the Federal Reserve (Fed) in June. The Fed is determined to absorb liquidity from the market as inflation fears are heightened and are needed to be taken care of.

Meanwhile, last week, the US dollar index (DXY) witnessed a steep fall after failing to sustain around the fresh 19-year high at 105.00. The DXY eased more than 2% from its recent highs. This week investors’ focus will remain on the release of the Fed Open Market Committee (FOMC), which is due on Friday. This will provides insights on the strategic planning by the Fed behind the announcement of the 50 bps by the Fed policymakers.

Gold technical analysis

On an hourly scale, XAU/USD is moving higher after sensing support from the critical support placed at $1,836.63. The critical resistance of $1,836.63 has turned into a support for the asset. The 50-period Exponential Moving Average (EMA) AT $1,836.65 has been significant support for the counter. Meanwhile, the Relative Strength Index (RSI) is attempting to break above the 60.00. This will trigger the gold pulls and will drive the asset higher.

Gold hourly chart