Gold Price Forecast: XAU/USD slid below $1,800 on broad greenback strength, despite lower US yields
|- XAU/USD plummeted almost $25.00 on steady US Core PCE reading, at 3.6%.
- A risk-off market mood boosted the US dollar, spurred by month-end flows and firm US T-bond yields.
- XAU/USD: A daily close below $1,780 could send gold tumbling towards $1,721.
Gold (XAU/USD) slides during the New York session, down almost 1%, trading at $1,782 at the time of writing. Earlier in the session, gold reached a fresh weekly low at $1,771 but bounced off the lows to stabilize at current levels.
Risk-off market sentiment spurred a flight towards safe-haven assets, but it failed to uplift the non-yielding metal. Concerns about high inflation, central bank tightening, and some CEOs from US companies complaining about supply shortages and high production costs dented the market mood.
The US Dollar Index reached a fresh weekly high at 94.30
That, in turn, boosted the greenback. The US Dollar Index is reversing Thursday losses, up 0.85%, at 94.14. During some time of the day, it reached a fresh weekly high around 94.30.
Contrarily, the US 10-year Treasury yield is firmly at 1.564%, unchanged throughout the day.
On the macroeconomic front, the US Core Personal Consumption Expenditure for September, the Federal Reserve favorite gauge for inflation, rose by 3.6%, a tad lower than the 3.7% foreseen by analysts.
Moreover, in October, the University of Michigan Consumer Sentiment weakened modestly and slid to 71.7 from 72.8 in September’s reading. Despite the fall, it was better than the 71.4 estimated by market participants.
The market’s reaction for the Core PCE, gold collapsed from $1,793 to $1,775 and gained traction towards the weekly low of $1,771, as the US Dollar Index continued its rally during the day.
XAU/USD Price Forecast: Technical outlook
Daily chart
Gold (XAU/USD) daily chart depicts the yellow metal has been up-trending steadily, in ranges of $20.00 average. The 100 and the 200-day moving averages (DMA’s) are above the spot price. Meanwhile, gold is testing the 50-day moving average at $1,780, which, if broken to the downside, confirmed by a daily close underneath it, could propel USD bulls to open fresh bets, in the possibility of a trip towards the September 29 low at $1,721.
The Relative Strenght Index (RSI), a momentum indicator, is at 51, above the 50-midline, which could refrain XAU/USD sellers from opening new bets, unless it breaks below 50.
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