Gold Price Forecast: XAU/USD accelerates towards $1,730 as DXY tumbles ahead of US ISM Services PMI

• Gold price has witnessed a sheer upside to near $1,723.30 on lower consensus for US ISM Services PMI.
• The DXY has slipped below 109.50 as the market mood has turned positive.
• The US ISM Services PMI is seen lower at 55.5 vs. 56.7.

Gold price (XAU/USD) has displayed a vertical upside after overstepping the critical hurdle of $1,718.00 in the Asian session. The precious metal has delivered an upside break of the consolidation formed in a narrow range of $1,708.82-1,718.15 and is expected to display more upside ahead. The yellow metal has picked significant bids amid lower consensus for US ISM Services PMI data.

The US ISM Services PMI data is seen lower at 55.5 against the prior release of 56.7. Also, the forward-looking Services New Orders Index is also expected to remain subdued at 59.5 vs. 59.9. The consequences of adopting sheer pace in hiking interest rates by the Federal Reserve (Fed) are visible in the service sector. Also, the big tech boys have already halted their recruitment process ahead of a decline in economic activities.

Meanwhile, the US dollar index (DXY) has witnessed a steep fall at open as the risk-off market mood is fading away. Risk-perceived currencies are gaining a lot of traction after turning extremely oversold as the fundamentals are still fragile. It is worth noting that US markets will open today after an extended weekend, therefore, higher volatility cannot be ruled out.

Gold technical analysis

Gold prices have poked the 200-period Exponential Moving Average (EMA) at $1,723.60 after witnessing a perpendicular upside move. The precious metal has also broken a small Symmetrical Triangle placed in a narrow range of $1,707.74-1,717.76.

Adding to that, the Relative Strength Index (RSI) (14) has stepped into the bullish range of 60.00-80.00, which has activated bulls for upside momentum.

Gold hourly chart