Gold Price Analysis: XAU/USD holds just above annual lows near $1790 as US data dump eyed

Spot gold (XAU/USD) prices are currently holding up above support in the form of the annual lows at $1782 as attention turns to an imminent US data dump at 1330GMT. December Core PCE inflation, December Personal Income and Spending and Q4 Employment Cost data will all be released. On the day, gold prices are nonetheless trading in heavy fashion, and currently trade about 0.3% lower around the $1790 mark, leaving them on course to post a third successive negative session.

The dollar remains perky on Friday with the DXY at fresh multi-month highs near 97.50 and on course for its largest one-week rise in seven months, which, combined with higher US yields across the curve, has been weighing on gold. Spot prices are now down about 2.5% on the week and more than 3.5% lower versus their pre-hawkish Fed levels. Analysts note that if the upcoming data releases (most importantly, the inflation data) feed into the narrative of more aggressive/front-loaded Fed tightening, thus further boosting the buck and yields, gold remains vulnerable to further losses.

That logic applies not only to the upcoming data on Friday, but also to next week’s data. Looking at XAU/USD from a technical perspective, its recent break below a medium-term upwards trend channel on Thursday that also saw the precious metal break below its 200-day moving average just above $1800 suggests further selling in on the cards. Bears will be looking for a test of recent November/December lows in the $1750 area.