Gold Price Forecast

The price of gold is lower on Thursday, falling from a high of $1,818.40 to a low of $1,794.45 and is down near 0.3%.

The lower move in gold was despite a softer US dollar that has retreated on Thursday from a three-month high.

The European Central Bank set a new inflation target which pushed the euro higher to test bearish commitments in the broader bear trend.

The greenback was also suffering due to data showed the number of Americans filing new claims for unemployment benefits rose unexpectedly last week, which raises sentiment in contrast to the market's positioning for a more hawkish central bank.

The Minutes of the US Federal Reserve's June policy meeting released the prior day have shown that Fed members agreed they should be poised to act if inflation or other risks materialized.

Meanwhile, the dollar index DXY, which measures the greenback against six rivals, fell 0.5% to 92.25 from Wednesday, when it touched 92.844 for the first time since April 5.

If the support of the formation holds, the price would be expected to rise to test the early April old support and now turned resistance area and weigh on the price of gold.

That being said, from a fundamental perspective, analysts at TD Securities argued that the pricing for Fed hikes remains too hawkish.

With gold already managing to hold onto its uptrend, this scenario could ultimately catalyze a return of institutional interest which could see prices firm north of $1900/oz.

• Gold technical analysis

The price has reached a 38.2% Fibonacci retracement of the mid-June bearish impulse and has been rejected.

The support structure is being pressured, testing the bull's commitments to the correction and the price would be expected to penetrate to at least the 38.2% if not the 50% Fibonacci landmarks in the 1,790s and 1,780s.

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