Gold Price Forecast: XAU/USD steadies near $1,770 as DXY pares NFP-led gains ahead of US inflation

• Gold price remains sidelined, recently bouncing off intraday low amid sluggish markets.
• Easing risk-aversion, pullback in Treasury yields favor recent consolidation in metal prices.
• China, inflation are the key catalysts amid a likely calmer week ahead.

Gold price (XAU/USD) pares intraday losses at around $1,775 amid the initial Monday morning in Europe. The yellow metal’s latest rebound could be linked to the technical support, as well as the US dollar’s retreat, amid a sluggish start to the key week.

That said, the US Dollar Index (DXY) traces the Treasury yields to trim the post-NFP gains. That said, the DXY eases to 106.65, after refreshing the two-week high to 206.93 the previous day. It’s worth noting that the US 10-year Treasury yields ease back to near 2.816% after rallying 14 basis points (bps) to 2.83% after the strong US jobs report for July.

Further, S&P 500 Futures also print mild gains and the Asia-Pacific shares remain indecisive as Taiwan-linked fears ease.

Elsewhere, strong prints of the US Fed fund futures suggesting the Fed’s 75 basis points (bps) rate hike in September keep the XAU/USD bears hopeful despite the latest rebound. For that, the US Consumer Price Index (CPI) for May, up for publishing on Wednesday, will be crucial for near-term directions.

Additionally, the recent rebound in China’s trade numbers and chatters that the dragon nation will overcome the latest economic crisis appear to have underpinned the XAU/USD’s corrective pullback, due to Beijing’s status among the world’s largest gold users.

Technical analysis

Gold price stays defensive around the 50-HMA, fading the bounce from a two-week-old support line, around $1,770-69 by the press time. Given the recently easing bearish bias of the MACD and the metal’s sustained trading beyond the short-term key support line, the quote is likely to remain firmer.

However, a clear upside break of the 50-HMA hurdle surrounding $1,777 appears necessary to recall the short-term XAU/USD bulls. Even so, the latest double tops around $1,795 and the $1,800 threshold challenge the metal’s further upside.

Meanwhile, the 200-HMA level of $1,757 adds to the downside filter, a break of which could direct the gold bears towards a July 22 swing high near $1,739.

Overall, gold grinds higher but the buyers need strong fundamental support to keep reins.

Gold: Hourly chart

Trend: Limited recovery expected