• Gold price is facing sheer volatility contraction, following the footprints of the DXY.
• Returns on US bonds have soared amid the absence of evidence claiming a slowdown in the price rise index.
• Soaring interest rates have forced households to postpone their housing demand.

Gold price (XAU/USD) has sensed selling pressure while attempting to sustain above the critical hurdle of $1,650.00. The gold prices are still inside the woods as firmer yields are capping the upside while the upbeat market sentiment is defending the downside.

The US dollar index (DXY) is displaying a lackluster performance in the Tokyo session amid the absence of potential triggers due to the light economic calendar. Also, an improvement in the risk appetite of the market participants has trimmed safe-haven’s appeal. The 10-year US Treasury yields have crossed 4.02% in the Tokyo session as little impact on price pressures in the US economy despite a long spell of Fed’s policy tightening has raised the odds of further rate hikes.

Minneapolis Fed Bank President Neel Kashkari stated on Tuesday that “Until I see some compelling evidence that core inflation has at least peaked, not ready to declare a pause in rate hikes,” reported Reuters.

On Wednesday, the release of the US Housing Starts will remain in focus. As per the expectations, 1.475M new homes are constructed by nuclear families, lower than the prior release of 1.575M. This could be the consequence of soaring borrowing costs, which have forced households to postpone their demand for real estate.

Gold technical analysis

On an hourly scale, Gold prices are auctioning in a symmetrical triangle, which indicates that the volatility has contracted. The downward-sloping trendline of the above-mentioned chart pattern is placed from Thursday’s high at $1,682.53 while the upward-sloping trendline is plotted from Friday’s low at $1,640.23.

The precious metal is overlapping with the 20-period Exponential Moving Average (EMA) at $1,652.25, which indicates a consolidation ahead.

Also, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates the unavailability of a potential trigger.

Gold hourly chart