Forecast for the price of gold: XAU/USD dips below $1,790 as DXY continues its comeback, Michigan CSI targeted

After losing the crucial support level of $1,788.00 in the Asian session, the price of gold (XAU/USD) has fallen to little under $1,785.00. After reaching a new monthly high on Wednesday at $1,807.96, the precious metal has begun a healthy corrective phase.

Investors are reducing their holdings of gold after realizing that while a single month's lower US Consumer Price Index (CPI) can temper the Federal Reserve's (Fed) hawkish direction, it cannot eliminate the likelihood of a rate hike in September. It should be noted that the US CPI came in at 8.5%, which was lower than expected and the previous release's 8.7% and 9.1%, respectively.

The US dollar index (DXY), meanwhile, has continued to recover after a confident pullback move, reaching a level close to 105.40. Currently, market investors are concentrating on the next US Michigan Consumer Sentiment Index (CSI), which is scheduled to release on Friday. From the previous release of 51.5, the sentiment data is anticipated to increase to 52.2. Consumer confidence is predicted to increase steadily after falling to 50 for the first time in the past 20 years, according to the data.

The cushion of the lower part of the Rising Channel, which was established on a four-hour scale, has been given up by the gold price, which is now at $1,788.00. The upper part of the aforementioned chart pattern is drawn from the high of July 22 at $1,739.37, and the lower part is drawn from the low of July 27 at $1,711.55.

The 50- and 200-period Exponential Moving Averages (EMAs) at $1,768.90 add to the upward filters by forming a golden cross. Although the Relative Strength Index (RSI) has moved into the 40.00–60.00 zone, indicating a minor correction, 40.00 is expected to provide support.