Gold Price Forecast: XAU/USD to challenge YTD low near $1,615 on failure to hold $1,642

FXStreet Insights Team FXStreet

Gold prices fell marginally amid a weakening US dollar despite a stronger-than-expected US inflation print. XAU/USD could retest year-to-date low near $1,615, FXStreet’s Haresh Menghani reports.

The path of least resistance for XAU/USD is to the downside

“The overnight failure near the $1,682-$1,684 supply zone suggests that the path of least resistance for the XAU/USD is to the downside. The outlook is reinforced by the fact that oscillators on daily/4-hour charts are holding in the negative territory.”

“A slide back towards the overnight swing low, around the $1,642 region, remains a distinct possibility. Some follow-through selling will expose the YTD low, around the $1,615 region touched in September. This is followed by the $1,600 round figure, which if broken decisively will be seen as a fresh trigger for bearish traders.”

“The $1,682-$1,684 region might continue to act as an immediate strong resistance ahead of the $1,700 mark. A sustained strength beyond the latter is needed to negate the near-term negative bias and set the stage for additional gains. Gold might then accelerate the momentum back towards retesting the monthly peak, around the $1,728-$1,730 zone.”

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD drops to two-week low, further below 0.7000 after RBA's less hawkish rate hike

AUD/USD drifts lower for the second straight day on Tuesday, hitting a fresh two-week low during the Asian session after the Reserve Bank of Australia's (RBA) widely expected 25 bps rate hike. The decision was far from unanimous, with three members preferring to hold rates at 4.60%. This tempers expectations of further tightening, which, along with modest US Dollar strength, weighs on the currency pair.

USD/JPY fails near 159.00 amid weak USD, intervention risks

USD/JPY edges lower during Tuesday’s Asian session, reversing part of the previous day's gains to 158.00 as the US Dollar remains depressed amid hopes for Iran diplomacy and ahead of US midterm elections. Meanwhile, intervention risks support the Japanese Yen, though the uncertainty over the timing of the next BoJ rate hike caps gains. This keeps the pair confined within a familiar range and warrants caution before placing directional bets.

Gold struggles below $3,950 amid Fed hike bets, ahead of US midterm elections

Gold weakens further below $3,950 during the Asian session, reversing part of the previous day's recovery from a one-year low set last week. Data released on Monday showed that US manufacturing sector business activity expanded for the 10th straight month in October. The Institute for Supply Management's Manufacturing PMI came in higher than consensus estimates and rose to 55.5 in October from 54.5 in the previous month. This reaffirms hawkish US Federal Reserve expectations, which along with rebounding US bond yields, prompt fresh selling around the non-yielding yellow metal.

Cardano extends losses as sellers stay in control

Cardano (ADA) extends correction, trading below $0.189 on Tuesday after losing key support zone the previous day. Mixed derivatives data and cautious on-chain metrics continue to weigh on bullish sentiment, while weakening technical indicators suggest further downside risks for ADA.

What a split Congress means for the US Dollar

The United States is going to the polls on Tuesday, and much is at stake. The mid-term elections mean the renovation of roughly one-third of the Senate and all 435 of the House seats. Additionally, special elections in Florida and Ohio will be held to fill the seats vacated by US Secretary of State Marco Rubio and Vice President JD Vance.

The 2% inflation target came from a throwaway remark. It now moves trillions

The Federal Reserve's 2% inflation goal grew out of an off-the-cuff remark by a New Zealand politician in 1988. Bond investors still price long-term US debt as if 2% holds, so a change in how the Fed measures inflation would move markets.