Gold Price Weekly Forecast: Technical outlook turns bullish heading into Thanksgiving Week


  • Gold turned north and erased the previous week’s losses.
  • The technical picture suggests that XAU/USD could test $2,000 in the near term. 
  • Markets are likely to turn choppy in the second half of next week.

Gold gathered bullish momentum and gained more than 2.5% this week as the US Dollar (USD) declined alongside the US Treasury bond yields. Next week’s economic docket will not offer any significant macroeconomic events and participants could watch XAU/USD’s technicals for trading opportunities.

What happened last week?

In the absence of high-tier data releases, Gold managed to stage a technical upside correction on Monday as sellers booked their profits after XAU/USD tested the 200-day Simple Moving Average (SMA) below $1,940.

On Tuesday, Gold gathered bullish momentum and advanced beyond $1,970. Inflation in the US, as measured by the change in the Consumer Price Index (CPI), declined to 3.2% on a yearly basis in October from 3.7% in September, the Bureau of Labor Statistics (BLS) reported. The Core CPI, which excludes volatile energy and food prices, rose 4% in the same period, down slightly from the 4.1% increase recorded in September. The benchmark 10-year US Treasury bond yield fell more than 3% after soft inflation data and broke below 4.5%, while the USD came under strong selling pressure. In turn, XAU/USD gained more than 1% on the day.

Retail Sales in the US declined 0.1% on a monthly basis in October, the US Census Bureau reported on Wednesday. This reading came in better than the market expectation for a 0.3% contraction and helped the USD stabilize following the previous day’s sharp decline. Thursday’s data, however, showed that the number of first-time applications for unemployment benefits climbed to 231,000 in the week ending November 11 from 218,000 and didn’t allow the currency to extend its recovery. Furthermore, the Federal Reserve (Fed) announced that Industrial Production contracted by 0.6% on a monthly basis in October. After Wednesday’s choppy action, Gold regained its traction and advanced toward $1,980.

As US Treasury yields continued to stretch lower on the last trading day of the week, Gold preserved its bullish momentum and advanced to its highest level in over a week above $1,990. Reuters reported that Fed Vice Chair Philip Jefferson told a US senator that the process of balance sheet wind-down faces no imminent end. "Under plausible assumptions, the size of the balance sheet could decline considerably further before reserves reach the level consistent with the ample reserves operating framework," Jefferson wrote in response to Republican US Senator Rick Scott, who posed a series of questions regarding the central bank’s balance sheet.

Meanwhile, demand-side dynamics also provided a boost to Gold prices this week. “Indian buyers brushed off record high local prices this week making gold purchases during the Diwali festival week in the country, while China premiums remained buoyant after the top-buyer continued to accumulate gold holdings,” Reuters reported.

Next week

The Fed will release the minutes of the October 31-November 1 policy meeting on Tuesday. Market participants are unlikely to pay attention to this publication, since the focus has already shifted to the possible timing of a Fed policy pivot next year. According to the CME Group FedWatch Tool, a no change in the interest rate in December is nearly fully priced in and markets see a less than 15% chance the policy rate will remain at 5.25%-5.5% by June next year. 

October Durable Goods Orders will be featured in the US economic docket on Wednesday alongside the weekly Initial Jobless Claims data. The market reaction could be straightforward to these figures, with worse-than-forecast numbers weighing on the USD and stronger figures supporting it.

US stock and bond markets will be closed on Thursday in observance of the Thanksgiving Day holiday. On Friday, both markets will operate half day.

S&P Global will release the preliminary Manufacturing and Services PMI surveys for November on Friday but the market action is likely to remain subdued amid thin trading conditions.

Investors could pay close attention to XAU/USD’s technical developments to find new opportunities.

Gold technical outlook

The Relative Strength Index (RSI) indicator on the daily chart climbed to 60, pointing to a buildup of bullish momentum in the near-term outlook. On the upside, $2,000 (psychological level, static level) aligns as immediate resistance before $2,010 (static level) and $2,040 (static level).

The 20-day Simple Moving Average (SMA) forms dynamic support at around $1,975 ahead of $1,960 (Fibonacci 38.2% retracement level of the latest uptrend). A daily close below the latter could attract sellers and open the door for an extended decline toward the $1,940-$1,930 area, where the 200-day, 100-day and the 50-day SMAs converge. 

Gold forecast poll

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended Content


Recommended Content

Editors’ Picks

EUR/USD holds above 1.0800 ahead of US inflation data

EUR/USD holds above 1.0800 ahead of US inflation data

EUR/USD stays in positive territory above 1.0800 after registering its highest daily close in over a month on Tuesday. The data from the Eurozone showed that the GDP grew at an annual rate of 0.4% in Q1. Focus shifts to April inflation report from the US.

EUR/USD News

GBP/USD advances above 1.2600, all eyes on US CPI data

GBP/USD advances above 1.2600, all eyes on US CPI data

GBP/USD preserves its bullish momentum and trades at its highest level in nearly two weeks above 1.2600 in the European session on Wednesday. The US Dollar struggles to find demand and allows the pair to stretch higher ahead of April CPI and Retail Sales data from the US.

GBP/USD News

Gold climbs above $2,370 as US yields edge lower ahead of inflation data

Gold climbs above $2,370 as US yields edge lower ahead of inflation data

Gold extends its uptrend and trades above $2,370 in the European session on Wednesday after gaining nearly 1% on Tuesday. The benchmark 10-year US Treasury bond yield stays in the red below 4.5% ahead of US inflation data, helping XAU/USD keep its footing.

Gold News

Ethereum bears attempt to take lead following increased odds for a spot ETH ETF denial

Ethereum bears attempt to take lead following increased odds for a spot ETH ETF denial

Ethereum is indicating signs of a bearish move on Tuesday as it is largely trading horizontally. Its co-founder Vitalik Buterin has also proposed a new type of gas fee structure, while the chances of the SEC approving a spot ETH ETF decrease with every passing day.

Read more

US CPI data expected to show slow progress towards 2% target

US CPI data expected to show slow progress towards 2% target

The US Consumer Price Index is set to rise 3.4% YoY in April, following the 3.5% increase in March. Annual core CPI inflation is expected to edge lower to 3.6% in April. The inflation report could influence the timing of the Fed’s policy pivot.

Read more

Majors

Cryptocurrencies

Signatures