Gold price (XAU/USD) is hoping for a rebound as the gold bears are indicating a loss of momentum after testing Wednesday’s low around $1,820.00. The precious metal is oscillating in a narrow range of $1,822.67-1,825.47 from the late New York session and is now showing some signs of an upside break of the rangebound move.
The commentary from Federal Reserve (Fed) chair Jerome Powell’s testimony that the central bank is ‘unintentionally committed’ to bringing price stability in the US economy has kept the gold prices on the tenterhooks. To achieve the targeted inflation rate, the Fed is needed to elevate interest rates quickly. Comparing the current inflation rate with the targeted one, the former is at least four times of the latter.
Meanwhile, the US dollar index (DXY) is expecting a downside move on displaying underperformance on the Purchase Managers Index (PMI) front. The Manufacturing PMI landed at 52.4 much lower than forecasts and the prior print of 56 and 57 respectively. Also, the Services PMI slipped sharply to 51.6 from the consensus of 53.5 and the prior print of 53.4.
On a broader note, the gold prices are displaying topsy-turvy moves in a range of $1,821.72-1,847.95. The 20- and 50-period Exponential Moving Averages (EMAs) at $1,828.30 and $1,831.58 respectively are scaling lower, which strengthens a downside bias. Meanwhile, the Relative Strength Index (RSI) (14) is displaying signs of momentum loss on the downside. The momentum oscillator is gauging support around 40.00 levels.