Gold Price Forecast: XAU/USD braces for US PCE Inflation, Durable Goods Orders below $1,800

Gold price (XAU/USD) treads water around $1,795 as it struggles to defend the first daily gains in three during Friday’s sluggish trading. In doing so, the precious metal prints mild gains inside a bearish chart formation (discussed below), while waiting for the key US statistics.

That said, the quote’s latest gains, or ability to stop the bearish move, could be linked to the news suggesting optimism over China’s pro-growth policies as the People’s Bank of China (PBOC) marked the biggest weekly cash injection in two months. The same joins the chatters surrounding Evergrande’s nearness to an offshore debt restructuring plan to underpin the firmer sentiment.

However, recently increasing hawkish Fed bets, especially after Thursday’s upbeat US data, join a rally in Shanghai’s hospitalization and challenges to China’s medical system, due to the latest easing of the Zero-Covid policy, to probe the risk-on mood.

Against this backdrop, S&P 500 Futures print mild gains while ignoring the Wall Street benchmarks. Further, the US 10-year Treasury bond yields extend the previous day’s rebound near the one-month high, marked early in the week.

Looking forward, the mixed mood in the market and the year-end positioning could test the Gold buyers as they approach the Federal Reserve’s preferred inflation gauge, namely the US Core Personal Consumption Expenditure (PCE) - Price Index, as well as Durable Goods Orders, for November. As per the market consensus, the US Core PCE Price Index remains unchanged at 0.2% MoM. However, the Annualized forecasts suggest softer figures of 4.7% YoY versus 5.0% previous readings. Further, US Durable Goods Orders could register a contraction of 0.6% in November compared to the previous increase of 1.1% (revised from 1.0%).

Also read: Pre-Christmas US Data Preview: Core PCE and Durable Goods may extend US Dollar retreat

Gold price technical analysis

Gold price stays defensive after bouncing off a one-month-old rising wedge bearish chart pattern’s lower line.

The yellow metal’s latest inaction could be linked to the sluggish MACD and the lower high on RSI (14), despite the Gold’s upside grind during December.

As a result, the XAU/USD rebound appears elusive unless defying the rising wedge formation, by crossing the pattern’s upper line that currently stands near $1,830. Following that, a run-up towards June’s peak of $1,880 can’t be ruled out.

It’s worth noting that multiple hurdles near the $1,800 round figure and $1,810 test Gold’s immediate recovery moves.

Alternatively, a downside break of the stated wedge’s support line, close to $1,788 at the latest, will confirm the theoretical slump targeting $1,690. However, the 21-DMA level and October’s high, respectively near $1,785 and $1,730, could challenge the Gold bears during the anticipated slump.

Gold price: Daily chart

Trend: Further downside expected