Gold Price Forecast: XAU/USD grinds near $1,750 as key US data, Fed Minutes loom

Gold price (XAU/USD) steadies around $1,740 after pushing back the bears the previous day. In doing so, the yellow metal portrays the typical pre-event anxiety while keeping the buyers positive amid softer US Dollar and Treasury yields.

The chatters surrounding the Federal Reserve’s (Fed) easy rate hikes and firmer prints of equities joined the alleged stockpiling of Gold by China to underpin the XAU/USD’s run-up the previous day. However, Covid woes from the dragon nation challenged the bullion buyers.

That said, Richmond Fed Manufacturing Index improved to -9 for November versus -10 prior while Kansas City Federal Reserve President Esther George recently said, “(We) could well take a higher interest rate for some time to convince households to hold on to savings.”

It’s worth noting that Nikkei Asia quotes the World Gold Council (WGC) data to spot increasing Gold buying from China. The news also mentioned the unloading of the US Treasury bonds by Beijing, which in turn favored the XAU/USD buyers.

Alternatively, seven-month high coronavirus numbers and multiple activity restrictions in the key states of the world’s second-largest economy challenged the Gold bulls.

Amid these plays, stocks in Europe and the UK, as well as Wall Street, closed positively whereas the US 10-year Treasury yields dropped six basis points (bps) to 3.76%.

Looking forward, the Gold price may witness a lackluster day ahead of the European session amid a cautious mood before the preliminary readings of November’s PMIs. Also important will be the Federal Open Market Committee (FOMC) Meeting Minutes and the US Durable Goods Orders for October.

Market players will look for clues of more confirmatory signals for the economic transition and the Fed’s 50 basis points (bps) worth of rate hike in December to continue with the risk-on mood and favor the gold buyers.

Technical analysis

Although sustained trading below the 50-SMA and observance of a one-week-old descending trend line keeps Gold sellers hopeful, an upwards-sloping trend line from November 09, around $1,737 by the press time, challenges the XAU/USD bears.

It’s worth noting that the RSI (14) and MACD conditions are showing sellers’ exhaustion and hence an upside clearance of the immediate resistance line, close to $1,746, could quickly propel the quote towards the 50-SMA hurdle of $1,761.

Following that, the monthly high surrounding $1,787 and the $1,800 threshold will be on the Gold buyer’s radar.

Alternatively, a downside break of the fortnight-old support line, near $1,737, may drop to the $1,720 level before targeting the $1,700 round figure.

However, the bullion’s downside past $1,700 needs validation from the 61.8% Fibonacci retracement level of November 03-15 upside, close to $1,681.

Overall, Gold price is likely to improve further but a clear break of the 50-SMA appears necessary to convince the bulls.

Gold: Four-hour chart

Trend: Further recovery expected