Gold Price Forecast: XAU/USD consolidates above $1,660 level amid modest USD strength

A combination of factors prompts some selling around gold on Thursday.
Rising US bond yields revive the USD demand and exert some pressure.
Bets for a less hawkish Fed offer support ahead of the US Q3 GDP report.

Haresh Menghani FXStreet

Gold struggles to gain any meaningful traction on Thursday and seesaws between tepid gains/minor losses through the first half of the European session. The XAU/USD remains below a nearly two-week high set the previous day and is currently trading around the $1,663-$1,662 area, nearly unchanged for the day.

The US dollar regains some positive traction and stages a goodish rebound from its lowest level since September 20, which, in turn, acts as a headwind for the dollar-denominated gold. Apart from this, a positive tone around the US equity futures further contributes to capping the upside for the safe-haven precious metal.

That said, expectations that the Fed may slow the pace of its policy tightening helps limit the downside for the non-yielding gold. The incoming US macro data pointed to signs of a slowdown in the world's largest economy and forced investors to trim their bets for more aggressive rate hikes by the US central bank.

Traders also prefer to move to the sidelines ahead of Thursday's key event/data risks. The European Central Bank is scheduled to announce its policy decision and is widely expected to hike interest rates by 75 bps. Apart from this, the Advance US Q3 GDP report should infuse some volatility and provide a fresh impetus to gold.

From a technical perspective, the recent recovery from the vicinity of the YTD low stalls near the $1,675 intermediate hurdle. This is followed by the $1,682 supply zone, which if cleared decisively will set the stage for an extension of the recent positive move witnessed over the past week or so, from the vicinity of the YTD low.

Key levels to watch

XAU/USD

Overview
Today last price	1661.94
Today Daily Change	-2.72
Today Daily Change %	-0.16
Today daily open	1664.66

Trends
Daily SMA20	1668.78
Daily SMA50	1689.2
Daily SMA100	1733.87
Daily SMA200	1811.82

Levels
Previous Daily High	1674.96
Previous Daily Low	1649.86
Previous Weekly High	1668.53
Previous Weekly Low	1617.35
Previous Monthly High	1735.17
Previous Monthly Low	1614.85
Daily Fibonacci 38.2%	1665.37
Daily Fibonacci 61.8%	1659.45
Daily Pivot Point S1	1651.36
Daily Pivot Point S2	1638.06
Daily Pivot Point S3	1626.26
Daily Pivot Point R1	1676.46
Daily Pivot Point R2	1688.26
Daily Pivot Point R3	1701.56

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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