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Forecast for Gold: XAU/USD to Waver Below $1,740 Amid Steady DXY, Focus on U.S. Durable Goods Orders

Alina Haynes

Aug 23, 2022 14:51

 截屏2022-08-04 下午5.12.51_1024x576.png

 

Gold prices (XAU/USD) are exhibiting erratic behavior within a tight range of $1,733.40-1,740.00 in the early Tokyo session. After a stronger rebound from Monday's low of $1,727.85, volatility has decreased for the precious metal. Gold is stuck due to conflicting reports about how hawkish Fed chair Jerome Powell would sound at the Jackson Hole Economic Symposium.

 

After reading the Federal Reserve's minutes from last week, it's evident that Fed officials agreed on the limited data showing that inflation pressures were easing and a resolution would take some time. The Fed is also dedicated to maintaining price stability in the economy. And to serve the same, the recent trend of rate increases should continue. A rate increase of 50 basis points (bps) would be best to show deference to expert opinion.

 

However, before that can happen, all eyes will be on Wednesday's report on US Durable Goods Orders. Market analysts predict that economic growth will slow to 0.5% from the previous release of 2%. When the US economy shows no change in the US core Consumer Price Index (CPI), a drop in economic data is not good for the US dollar index (DXY).

 

Gold prices have rallied strongly after reaching the 61.8% Fibonacci retracement (placed from July 21 low at $1,680.91 to August 10 high at $1,807.93) at $1,729.44. The 20-period Exponential Moving Average (EMA) is located at $1,738.60, and it is acting as a barrier for the precious metal, preventing it from going lower.

 

The Relative Strength Index (14), which predicts future price declines, is currently fluctuating inside a negative 20.00-40.00 zone.