Gold Price Forecast: XAU/USD Approaching $1,970, Focus on US CPI and Fed

• Gold price is approaching the $1,970 resistance, while the DXY Dollar Index has resumed its downward path.
• S&P 500 futures have posted stellar gains as investors have benefited from risk appetite.
• The Fed is less likely to raise interest rates as tight lending conditions from US commercial banks have cut into liquidity.

The price of Gold (XAU/USD) It is moving towards the crucial resistance of $1,970, after a strong recovery from $1,956 during the European session. precious metal has attracted major buys after the sharp fall in the DXY Dollar Index.

S&P 500 futures have posted stellar gains during the European session as investors have propped up the risk appetite. The American stock indices are becoming the talk of the people, as they investors expect the Federal Reserve (Fed) to go for a no-change monetary policy after finishing their meeting of days on June 14.

Previously, Fed Chairman Jerome Powell announced that further interest rate hikes are less likely, as strict US commercial bank lending conditions are dampening inflationary pressures. And, now, the easing of labor market conditions is an icing on the cake, which is giving the Fed the luxury of keeping interest rates stable.

Meanwhile, US economic activity is also putting up a poor show, as manufacturing activity is in constant contraction and activity in the service sector hardly shows any expansion.

The DXY Dollar Index looks to resume its move lower amid an inability to hold above intermediate support around 103.30.

Gold price technical analysis

The price of gold is consolidating in a narrow range of $1,954-$1,970 on the 2-hour chart, indicating a contraction in volatility. On a broader note, the rise in the price of Gold is constrained from the May 18 high around $1,986 while the downside is limited to the lows around $1,936 of May 26.

The 50 period EMA at $1,959 indicates that the overall trend is not directional.

In addition, the Relative Strength Index (RSI) (14) hovers in the 40-60 range, indicating that investors are waiting for a possible trigger.

4 hour chart gold