Gold Price Forecast: XAU/USD aims establishment above $1,630 as DXY skids, US data eyed

• Gold prices need stabilization above $1,630.00 for an upside towards $1,650.00.

• The DXY is displaying a lackluster performance amid lower consensus for Consumer Durables data.

• Fed Powell will dictate the roadmap of hiking interest rates for the remaining 2022.

Gold price (XAU/USD) has extended its gains to near $1,630.00 after rebounding from $1,621.14 on Monday. The precious metal is eyeing an establishment above $,1630.00 as the US dollar index (DXY) is displaying a vulnerable performance right from the opening tick.

The DXY is facing signs of exhaustion amid lower consensus for the US Durable Goods Orders data. As per the consensus, investors will find a decline in the economic data by 1.1% against a decline of 0.1% recorded in precious reading. Thanks to the soaring core Consumer Price Index (CPI) and accelerating interest rates, which have trimmed the demand for durable goods. As the Federal Reserve (Fed) has pushed interest rates to 3-3.75%, households will face higher interest obligations. Therefore, individuals are preferring to postpone the demand rather than liabiling themselves for higher payouts. Also, a higher inflation rate has trimmed the confidence of consumers broadly.

Apart from that, the speech from Fed chair Jerome Powell will also remain in focus, which is due on Wednesday. Fed Powell will provide the roadmap for hiking interest rates for the remaining 2022.

Gold technical analysis

Gold prices have bounced back sharply from $1,621.14 after a negative divergence formation on an hourly scale. A loss in downside momentum was observed when the precious metal printed a lower low while the momentum oscillator Relative Strength Index (RSI) (14) made a higher low.

The asset has crossed the 20-period Exponential Moving Average (EMA) at $1,629.43 and is oscillating the 50-EMA around $1,632.35. The horizontal resistance is placed from Monday’s high at $1,649.83.

Gold hourly chart