• Gold price has defended the crucial support of $1,850.00 but is still inside the woods.
• Sustenance of the US inflation above 8% will bolster the odds of a bumper rate hike by the Fed.
• The precious metal is expected to remain sideways on Ascending Triangle formation.

Gold price (XAU/USD) is bided strongly below the critical support of $1,850.00 as the US dollar index (DXY) is displaying back and forth moves. The precious metal witnessed barricades while attempting a break above $1,860.00 and slipped lower to $1,849.11.

The market participants need to understand the fact that trading sessions before a principal event bring wild moves in the respective counters. The investing community is awaiting the release of the US Consumer Price Index (CPI), which is due on Friday. Therefore, wild swings cannot be ruled out.

The US inflation is seen as stable at 8.3% on annual basis. The Federal Reserve (Fed) is featuring quantitative restricting measures for a longer period but is still far from achieving the desired outcome. The central bank has already announced two rate hikes by 25 basis points (bps) in March and 50 bps in May. Considering the galloping price pressures and upbeat employment data, which were released last week, a jumbo rate hike by the Fed looks real.

Gold technical analysis

On an hourly scale, the gold price is continued to trade in an Ascending Triangle whose upward sloping trendline is placed from May 16 low at $1,786.94 while the horizontal resistance is plotted from May 24 high at $1,869.69. The 50-period Exponential Moving Average (EMA) at $1,851.36 is overlapping with the gold prices, which signals a consolidation ahead. Meanwhile, the Relative Strength Index (RSI) (14) has faced a hurdle around 60.00 and has shifted back into the 40.00-60.00, which signals a continuation of a consolidation phase.

Gold hourly chart