Gold Price Forecast: XAU/USD juggles below $1,740 ahead of US GDP

• Gold price is hovering below $1,740.00 as investors await US GDP.
• Less-than-expected hawkish commentary from the Fed has infused fresh blood into the gold bulls.
• The DXY has witnessed an extreme sell-off as the Fed has confirmed a slump in retail demand.

Gold price (XAU/USD) is displaying topsy-turvy moves in a minute range of $1,734.19-1,741.78 in the Asian session. The precious metal is auctioning in a charted territory after a sheer upside move from a low of $1,711.56 on Wednesday. Usually, a vertical upside move is followed by a sideways action as investors initiate more longs through the inventory distribution structure.

A mild hawkish commentary from the Federal Reserve (Fed) in the monetary policy meeting on Wednesday has infused fresh blood into the gold bulls. The Fed is seeing the interest rates at 3.5% by the end of 2022. This indicates that there is less room for bumper rate hikes now and September’s monetary policy will see normalcy in the rate hike extent.

Meanwhile, the US dollar index (DXY) is expected to perform vulnerable as Fed chair Jerome Powell has highlighted a slump in retail demand. Going forward, the US Gross Domestic Product (GDP) numbers will remain in focus. As per the market consensus, the US GDP data will shift lower to 8% against the prior release of 8.3% on a quarterly basis. While the annualized figure will significantly improve to 0.4% vs. -1.6% in the prior release.

Gold technical analysis

On an hourly scale, the gold price is gearing up for an upside break of the supply zone placed in a narrow range of $1,739.63-1,745.03. A golden cross, represented by the 50-and 200-period Exponential Moving Averages (EMAs) at $1,720.00 has bolstered the odds of a bullish reversal.

Adding to that, the Relative Strength Index (RSI) has shifted into the bullish range of 60.00-80.00, which signals more gains ahead.

Gold hourly chart