Gold Price Forecast: XAUUSD steadies around multi-day top near $1,750 on Fed concerns, US data eyed

• Gold price remains sidelined around the highest levels since late August.
• Lack of major catalysts, market’s break after the US CPI-led storm challenge XAUUSD bulls.
• US inflation triggered setback for hawkish Fed bets, propelled equities and riskier assets.
• US Michigan CSI, further clues on inflation eyed for fresh impulse.

Gold price (XAUUSD) seesaws around the highest levels in 11 weeks as bulls seek more clues to extend the US inflation-led rally during Friday’s Asian session. That said, the yellow metal refreshed the multi-day peak around $1,757 after the downbeat US Consumer Price Index (CPI) data for October, before retreating to $1,752 by the press time.

An eight-month low print of the US CPI, to 7.7% YoY versus 8.0% expected and 8.2% prior, bolstered the case of the US Federal Reserve’s (Fed) easy rate hike of 50 basis points (bps) in December, which in turn propelled the market’s optimism and riskier assets like the XAUUSD. That said, the CME’s FedWatch Tool signals nearly 80% probability of the Fed’s 50 basis points (bps) rate hike in December versus around 55% just following the last week’s Fed meeting.

Not only had the headline CPI but the Core CPI also dropped to 6.3% compared to 6.5% market forecasts and 6.6% previous readings.

Following the data, Dallas Federal Reserve President Lorie Logan said that October CPI inflation data is a welcome relief while adding that (it) may soon be appropriate to slow pace of rate increases. On the same line, Federal Reserve Bank of Philadelphia President Patrick Harker said on Thursday that the US Federal Reserve could slow the rate hike pace in the coming months, as reported by Reuters. It should be noted that Kansas City Federal Reserve President Esther George, Federal Reserve Bank of Cleveland President Loretta Mester and San Francisco Fed President Mary Daly also recently promoted easy rate hikes for future meetings.

While portraying the mood, Wall Street benchmarks rallied and the US Treasury yields slumped, which in turn drowned the US Dollar Index (DXY) and helped the Gold price to portray a stellar run-up.

It’s worth noting that fears emanating from China’s covid conditions and a light calendar ahead of the first readings of the US Michigan Consumer Sentiment Index (CSI) for November, expected 59.5 versus 59.9 prior, may allow the gold price to pare some of the latest gains. Even so, the XAUUSD bulls are likely to keep the reins unless witnessing any strongly hawkish message surrounding the Fed’s next move.

Technical analysis

Gold buyers can ignore the latest inaction, mainly led by the overbought RSI (14), amid a clear upside break of the $1,716-15 hurdle, now support comprising the 100-DMA and a downward sloping trend line from September 12.

That said, the late August swing high of around $1,765 could act as an immediate upside hurdle before directing the XAUUSD bulls toward a five-week-old horizontal resistance area surrounding $1,805.

Alternatively, tops marked during October and September, respectively around $1,735 and $1,730, could challenge the Gold bears before highlighting the previous resistance confluence around $1,716-15.

Overall, gold stays on the buyer’s radar unless the quote stays beyond $1,716, a break of which could quickly drag it to the 50-DMA support near $1,675.

Gold price: Daily chart

Trend: Bullish