• Gold price is auctioning above the $1,640.00 support amid ambiguous market mood.
• The Fed is expected to hike interest rates by 75 bps for the fourth time.
• ISM Manufacturing PMI gamut is seen lower than consensus which could impact the DXY.

Gold price (XAU/USD) is displaying a lackluster performance in the Tokyo session as the market impulse is delivering mixed responses. The precious metal is oscillating in a narrow range of $1,640.60-1,644.25, following the footprints of the rangebound US dollar index (DXY).

S&P500 futures are holding their Friday’s gains but have displayed a marginal correction in Tokyo, which seems insignificant. However, the alpha generated by US government bonds is gaining traction. The 10-year US Treasury yields have climbed to 4.04%.

Gold prices are trading sideways as anxiety ahead of Federal Reserve (Fed) monetary policy has shifted investors to the sidelines. As per the CME FedWatch tool, the chances of a 75 basis point (bps) rate hike stand at 82.3%. Giant investment banking firm, Goldman Sachs, vouch for a 75 bps rate hike this week and sees the desired terminal rate beyond 4.75% to 5%.

Apart from that, Tuesday’s PMI data also holds significant importance. As per the projections, ISM Manufacturing PMI data is seen lower at 50.0 vs. the prior release of 50.9. Also, the ISM New Orders Index will be a crucial catalyst that displays forward demand and is seen significantly higher at 49.1 against the former figure of 47.1.

Gold technical analysis

On an hourly scale, the gold price is playing around weekly lows at $1,638.15, recorded on Tuesday.

The precious metal is trading below the 20-and 50-period Exponential Moving Averages (EMAs) at $1,644.54 and $1,655.63 respectively, which adds to the downside filters.

Meanwhile, the Relative Strength Index (RSI) (14) is facing hurdles around 40.00, which indicates that the downside momentum is not over yet.

Gold hourly chart