• XAU/USD has slipped below $1,930 on a firmer DXY amid rising bets on Fed’s tightening policy.
• A higher prior estimate of the US CPI may bring more uncertainty to the market.
• The formation of the descending triangle is indicating a balanced profile ahead.

Gold (XAU/USD) has tumbled below its principal cushion of $1,930.00 as the market participants are raising bets on settlement of the US dollar index (DXY) above the crucial resistance of 100.00. The precious metal is falling gradually in the Asian session after a mildly positive start on Friday.

The discussions over pushing the interest rate to its mean reversion by the Federal Reserve (Fed) policymakers are underpinning the greenback against the yellow metal. A preliminary estimate of the yearly US Consumer Price Index (CPI) at 6.6%, which will release next week, is dictating the story of soaring inflation. Federal Open Market Committee (FOMC) members have narrated the neutral rate at 2.4% at which demand will not dampen and growth will not de-escalate. To shift the current interest rates to the neutral rate, the Fed has already announced one or more interest rate hikes by 50 basis points (bps) out of the six interest rate hikes to be announced this year.

The DXY is trading around 100.00, seeking a trigger that will drive the asset higher. Meanwhile, the 10-year US Treasury yields are trading at 2.66%, at the press time and are looking to extend gains by overstepping a three-year high at 2.67%.

Gold Technical Analysis

On an hourly scale, XAU/USD is oscillating in a descending triangle formation whose horizontal support is placed at $1,915.50 while the descending trendline is plotted from March 31 high at $1,949.89. The 20- and 200-period Exponential Moving Averages (EMAs) are overlapping each other, which signals a consolidation ahead.

Gold hourly chart