Gold Price Forecast: XAU/USD oscillates below $1,770, downside looks likely ahead of Fed minutes

• Gold price is establishing below $1,770.00 as soaring recession fears underpinned the DXY.
• The BOE noted that volatility in the oil and raw material prices may amplify economic shocks in the future.
• Going forward, the release of the FOMC minutes will provide further direction in the gold prices.

Gold price (XAU/USD) has turned sideways after displaying a vertical downside move. The precious metal is displaying back and forth moves in a narrow range of $1,763.90-1,771.37 in early Tokyo. The asset witnessed a steep fall after the market participants channelize their liquidity into the US dollar index (DXY) amid soaring recession fears.

The statement from the Bank of England (BOE) that the outlook for the global economy has deteriorated materially and that volatility in the energy and raw materials cost is hinting for a significant risk of disruption, which could amplify economic shocks in the future as per ANZ Research.

The gold prices closed below the psychological support of $1,800.00 for the first time in the past five months and plunged to a fresh six-month low at $1,763.93. The follow-up oscillating seems lucrative for the gold bears and more downside in the counter is on the cards.

In today’s session, the release of the Federal Open Market Committee (FOMC) minutes will remain in focus. June’s monetary policy minutes will provide a detailed viewpoint of Federal Reserve (Fed) policymakers on supporting the 75 basis points (bps) interest rate hike by the Fed.

Gold technical analysis

On a daily scale, the gold prices accelerated their losses after violating the horizontal support line placed from January’s low at $1,782.68. The 20-period Exponential Moving Average (EMA) at $1,817.42 is acting as a major barricade for the counter. Meanwhile, the Relative Strength Index (RSI) has slipped below 40.00 and is indicating more downside ahead.  The momentum oscillator is not displaying any signs of divergence and an oversold situation. Therefore, more downside cannot be ruled out.

Gold daily chart