Gold Price Forecast: XAUUSD holds $1,700 support despite risk-off mood, US inflation eyed

Gold price has sensed support around a $1,702.00 cushion despite negative market sentiment.
The DXY recovered significantly to near 110.40 ahead of October’s inflation report.
Core CPI figure will be of utmost importance as it has not displayed signs of exhaustion yet.

Sagar Dua FXStreet

Gold price (XAUUSD) continuously picks bids around the immediate hurdle of $1,702.00 from Wednesday. The precious metal surrendered its entire Wednesday’s gains after the risk profile turned sour as investors underpinned the US dollar index (DXY) ahead of the US inflation event.

The S&P500 index was the most prominent victim as investors turned anxious ahead of the outcome of the mid-term elections in addition to October’s inflation report. A majority win of Republicans will trigger political instability as approval of bills and laws will have to take a tangled route. Meanwhile, the DXY recovered sharply after registering a fresh seven-week low at 109.35.

On Thursday, the US inflation figures will remain in the spotlight. As per the preliminary estimates, the headline US CPI will decline to 8.0% vs. the prior release of 8.2%. Thanks to the falling gasoline prices that are continuously weighing pressure on plain-vanilla Consumer Price Index (CPI) figures. Also, the core CPI is seen marginally lower at 6.5%. Investors will mainly focus on core CPI figures as the catalyst has not yet displayed signs of meaningful exhaustion.

Gold technical analysis

On an hourly scale, the gold price oscillates between $1,702.10-1,722.40 after a sheer upside move. The precious metal still holds the 50-period Exponential Moving Average (EMA) at $1,698.40, which signals that the upside is intact.

The Relative Strength Index (RSI) (14) has shifted into the 40.00-60.00 after remaining in the bullish range, indicating that the upside momentum has exhausted but doesn’t warrant a bearish reversal.

Gold hourly chart

XAU/USD

Overview
Today last price	1706.63
Today Daily Change	-5.48
Today Daily Change %	-0.32
Today daily open	1712.11

Trends
Daily SMA20	1654.56
Daily SMA50	1673.64
Daily SMA100	1717.62
Daily SMA200	1804.42

Levels
Previous Daily High	1716.95
Previous Daily Low	1664.76
Previous Weekly High	1682.49
Previous Weekly Low	1616.69
Previous Monthly High	1729.58
Previous Monthly Low	1617.35
Daily Fibonacci 38.2%	1697.01
Daily Fibonacci 61.8%	1684.7
Daily Pivot Point S1	1678.93
Daily Pivot Point S2	1645.75
Daily Pivot Point S3	1626.74
Daily Pivot Point R1	1731.12
Daily Pivot Point R2	1750.13
Daily Pivot Point R3	1783.31

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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