Gold Price Forecast: XAU/USD balances above $1,820 as DXY cripples, US Retail Sales eyed

• Gold price has moved above $1,820 as DXY weakens on fewer economic events.
• The Fed is expected to feature two more jumbo rate hikes in CY2022.
• A bullish range shift in the RSI (14) has strengthened the gold bulls.

Gold price (XAU/USD) is establishing itself above $1,820.00 after finding an intense responsive buying action below the psychological support of $1,800.00 on Friday. It looks like the firmer rebound in the precious metal has turned the table in the favor of bulls. The bright metal is eyeing an initiative buying interest for a further upside move amid weakness in the US dollar index (DXY).

The DXY has witnessed a steep fall after failing to sustain at fresh 19-year highs of 105.00 last week. A follow-up correction in the DXY after a juggernaut rally has improved the demand for the yellow metal. The recent fall in the DXY could be the result of fully discounted two more jumbo interest rate hikes by the Federal Reserve (Fed) this year. The Fed announced a rate hike by 50 basis points (bps) in May’s first week and the interview of Fed chair Jerome Powell with the Marketplace national radio program has bolstered the odds of two more jumbo rate hikes consecutively.

US Retail Sales

In today’s session, the release of the US Retail Sales will hog the limelight. A preliminary estimate for the monthly US Retail Sales is 0.7% against the prior print of 0.5%. Higher Retail Sales will indicate the confidence of consumers in the economy and eventually, it will strengthen the DXY and weaken the gold prices.

Gold technical analysis

On an hourly scale, a firmer responsive buying action in the gold prices below the psychological support of $1,800.00 has strengthened the asset. The precious metal is trading near the trendline placed from May’s high at $1,909.83. A bullish range shift has been witnessed from the momentum oscillator, Relative Strength Index (RSI) (14). The oscillator has shifted into the 60.00-80.00 range, which signals a firmer upside move ahead. The RSI (14) faced multiple failures while overstepping 60.00. Also, the gold prices have established above the 20-period Exponential Moving Average (EMA) at $1,816.50, which adds to the upside filters.

Gold hourly chart