Gold Price Forecast: XAU/USD aims establishment above $1,810, Fed minutes in focus

• Gold price is expected to balance above $1,810.00 on a weaker DXY.
• The downbeat US ISM economic data has strengthened the recession fears.
• Advancing recession fears have trimmed the odds of a bumper rate hike by the Fed.

Gold price (XAU/USD) is likely to violate the critical hurdle of $1,810.00 and may establish above the same as the US dollar index (DXY) has entered into a corrective mode. On Friday, the previous metal displayed a responsive buying action after printing a fresh five-month low at $1,784.57. Usually, a responsive buying action in the asset indicates that the asset has become a value bet now.

A potential correction in the DXY on Friday resulted in a firmer recovery in the gold prices. The downbeat US Institute for Supply Management (ISM) data strengthened the DXY bears. The US ISM Manufacturing PMI landed at 53, lower than the expectations and the prior print of 54.9 and 56.1 respectively. Apart from that, the Employment Index and New Orders Index displayed a vulnerable performance.

The downbeat economic data has triggered recession fears in the US economy, which may trim the odds of a bumper rate hike by the Federal Reserve (Fed) for its July interest rate decision announcement. Going forward, the Federal Open Market Committee (FOMC) minutes will remain in focus, which is due on Wednesday. This will provide a detailed view of the decision-making by the Fed.

Gold technical analysis

On an hourly scale, gold prices have violated the critical hurdle of $1,805.44 and are oscillating above the same. The asset has crossed the 20-and 50-period Exponential Moving Averages (EMAs) at $1,803.57 and $1,807.30 respectively. It is worth noting that the asset’s price is auctioning above the short-term EMAs while the 20-EMA is trading lower than the 50-EMA. This indicates that the buying action in the asset is very much firmer. Meanwhile, the Relative Strength Index (RSI) (14) is attempting to breach 60.00, which will bring a fresh rally in the asset.

Gold hourly chart