Gold Price Forecast: XAU/USD surges above $1,970 amid softer USD, Fed Powell’s dovish comments

Gold price extends its upside for the fourth consecutive day.
The weekly Initial Jobless Claims dropped to 198K last week, the lowest level since January.
Fed Chair Jerome Powell signaled no further rate hikes by the Fed, which dragged the USD lower.

Lallalit Srijandorn FXStreet

Gold price (XAU/USD) gains momentum to $1,978, the highest level since late July during the early Asian trading hours on Friday. The rally of the precious metal is bolstered by the decline of the US dollar (USD) following Fed Powell’s dovish comments and a safe-haven flow.

Meanwhile, the US Dollar Index (DXY), a measure of the value of USD against six other major currencies, consolidates its recent losses around 105.85. US Treasury yields edge higher, with the 10-year Treasury yield settling at 4.99%, the highest level since 2007.

The US job data on Thursday indicated the economy in the US remains solid. The weekly Initial Jobless Claims dropped to 198,000 for the week ending October 14, the lowest level since January. Existing home sales fell 2.0% MoM in September and 19% YoY, the lowest level since 2010. These numbers indicate that higher mortgage costs negatively impact housing market confidence.

Fed Chair Jerome Powell signaled a desire to pause rate hikes and watch how economic data develops in the coming months. Powell further stated that further tightening of monetary policy might be appropriate if there is more evidence about above-trend growth and a tight labor market. His comments dragged the USD lower broadly and boosted USD-denominated gold.

In the absence of top-tier economic data release from the US, market participants will keep an eye on the Fed officials' speech, including Logan, Mester, and Harker.

XAU/USD

Overview
Today last price	1977.26
Today Daily Change	2.78
Today Daily Change %	0.14
Today daily open	1974.48

Trends
Daily SMA20	1880.89
Daily SMA50	1902.92
Daily SMA100	1922.49
Daily SMA200	1930.55

Levels
Previous Daily High	1977.76
Previous Daily Low	1945.25
Previous Weekly High	1933.34
Previous Weekly Low	1832.62
Previous Monthly High	1953.01
Previous Monthly Low	1846.37
Daily Fibonacci 38.2%	1965.34
Daily Fibonacci 61.8%	1957.67
Daily Pivot Point S1	1953.9
Daily Pivot Point S2	1933.32
Daily Pivot Point S3	1921.39
Daily Pivot Point R1	1986.41
Daily Pivot Point R2	1998.34
Daily Pivot Point R3	2018.92

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

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