Gold Price Forecast: XAU/USD licks its wounds ahead of Federal Reserve’s preferred inflation

Gold price (XAU/USD) makes rounds to $1,793 as bears take a breather after a two-day losing streak during Friday’s sluggish morning. Even so, the yellow metal stays bearish amid hawkish hopes from the Federal Reserve (Fed), especially after the firmer United States statistics. That said, the quote’s latest rebound could be linked to the US Dollar’s retreat as traders await the key US Core Personal Consumption Expenditure (PCE) - Price Index and Durable Goods Orders for November.

United States data renew hawkish Federal Reserve bets, weigh on Gold price

Having witnessed an upbeat start to Thursday, Gold price witnessed heavy selling as the US data renewed hawkish expectations from the US Federal Reserve and propelled the US Dollar. That said, the US economy expanded at an annualized rate of 3.2% in the third quarter (Q3), per the final readings of the Gross Domestic Product (GDP), versus 2.9% previous estimates. Further, the Personal Consumption Expenditure (PCE) Prices match 4.3% QoQ estimations during Q3 2022 whereas the Core PCE improved to 4.7% QoQ versus 4.6% market forecasts.

Mixed geopolitics, bond market updates trouble XAU/USD traders

Contrary to the firmer United States data, risk-on mood and downbeat Treasury yields weighed on the US Dollar, which in turn allowed Gold price to pare losses. The same could be linked to the sentiment-positive headlines from China and mixed US data, as well as the Bank of Japan’s (BOJ) another unscheduled bond operation.

That said, the US Senate’s passage of a $1.7 trillion government funding bill and the latest comments from US President Joe Biden showing readiness to tame inflation also add filters to the Gold price moves.

Firmer US statistics to please Gold sellers

Although the recent inaction in the market allows Gold traders to portray indecision, the likely upbeat prints of the US inflation and output-related data could allow the XAU/USD bears to tighten their grip.

Forecasts suggest that the US Core Personal Consumption Expenditure (PCE) - Price Index, the Federal Reserve’s preferred inflation gauge, will join the monthly Durable Goods Orders to offer the one last shot of market activity before witnessing the holiday-linked inaction. Forecasts suggest that 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%).

Gold price technical analysis

Gold price remains on the bear’s radar as it broke a one-week-old ascending trend line and the 50-Simple Moving Average (SMA) the previous day, after forming a “double top” bearish chart formation around $1,825.

Adding strength to the downside bias is the absence of the oversold conditions for the Relative Strength Index (RSI), located at 14, as well as the bearish signals from the Moving Average Convergence and Divergence (MACD) indicator.

That said, the Gold price can ignore the latest rebound unless the commodity stays below a convergence of the 50-SMA and previous support line from December 16, close to $1,799 by the press time. Also challenging the upside filter is the $1,800 threshold.

Following that, the recovery moves could aim for the “double tops” marked around $1,825, a break of which will give control to the Gold buyers targeting June’s peak surrounding $1,880.

On the contrary, a three-week-old ascending support line, near $1,779 at the latest, lures intraday sellers of the Gold. However, the likely oversold conditions of the RSI around there could join the 200-SMA, near $1,772 by the press time, to challenge the XAU/USD bears afterward.

Ina case where the Gold price remains bearish past $1,772, the odds of witnessing a slump toward the monthly low near $1,765, and then a battle with the multiple supports near $1,760, can’t be ruled out.

Overall, the Gold price remains on the bear’s radar despite the latest corrective bounce.

Gold price: Four-hour chart

Trend: Further downside expected