Gold Price Forecast: XAUUSD pressured as core PCE jumps, justifying further Fed action

  • Gold price records a fresh three-day low spurred by a strong US Dollar.
  • The Fed’s preferred gauge for inflation, the Core PCE, smashed estimates, justifying additional action.
  •  US Treasury bond yields jumped, with the 10-year eyeing to recoup the 4% threshold.

Gold price slides and extends its losses below $1650 due to stubbornly high US inflation reported namely the Core Personal Consumption Expenditures (PCE), the Federal Reserve’s favorite gauge of inflation, which increased more than estimates, bolstering the US Dollar. Therefore, the XAUUSD is trading at $1641.62, diving 1.23%, eyeing the weekly lows of around $1638.

The Fed’s gauge of inflation justifies additional tightening

On Friday, the US Commerce Department revealed that September’s US inflation, as measured by the Core PCE, which strips volatile items like food and energy, jumped 0.5% MoM, higher than the previous reading, while annually based, escalated by 5.1%, above 4.9% forecasts by street’s analysts. In a separate report, the Employment Cost Index (ECI), an indicator used by the Fed in addressing inflation on wages, increased by 1.2% in the July-September period, as reported by the Department of Labor.

Given the backdrop, the so-called Fed pivot narrative could be tossed away as inflation remains stubbornly high and salaries are rising, despite the Federal Reserve’s effort to tame inflation.

Of late, additional US economic data was reported, with the University of Michigan (UoM) Consumer Sentiment unchanged at 59.9. Consumer’s inflation expectations for the 1-year horizon easied from 5.1% to 5%, and for a 5-years and beyond, were unchanged at 2.9%.

US Dollar bolstered on PCE data, Federal Reserve meeting eyed

After the data was released, the XAU remained on the defensive, as the reasons above will justify further Fed tightening. The US Dollar Index, a measure of the buck’s value against six currencies, is up 0.20%, at 110.78, while US Treasury yields, namely the 10-year benchmark rate, recover five bps up at 3.973%.

In the meantime, Wall Street holds to gains amidst a decent earnings season, keeping US equities in the green.

Now market participants turn to the next week’s Federal Reserve Open Market Committee (FOMC), in which most analysts expect the Fed to hike rates by 75 bps, as reported by the CME FedWatch Tool, with odds at an 84.5% chance. However, December’s meeting is split between 50 or 75 bps, with the majority of the investors

Gold Key Technical Levels


Today last price 1640.93
Today Daily Change -22.32
Today Daily Change % -1.34
Today daily open 1663.25
Daily SMA20 1668.91
Daily SMA50 1687.29
Daily SMA100 1732.02
Daily SMA200 1810.93
Previous Daily High 1670.86
Previous Daily Low 1654.88
Previous Weekly High 1668.53
Previous Weekly Low 1617.35
Previous Monthly High 1735.17
Previous Monthly Low 1614.85
Daily Fibonacci 38.2% 1660.98
Daily Fibonacci 61.8% 1664.76
Daily Pivot Point S1 1655.13
Daily Pivot Point S2 1647.02
Daily Pivot Point S3 1639.15
Daily Pivot Point R1 1671.11
Daily Pivot Point R2 1678.98
Daily Pivot Point R3 1687.09



Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content

Recommended content

Editors’ Picks

AUD/USD bounces back from five-month lows

AUD/USD bounces back from five-month lows

AUD/USD ends its three-day decline on Wednesday, bouncing back from levels not seen since mid-November. Nevertheless, hawkish remarks from Federal Reserve officials and the influx of safe-haven flows could bolster the US Dollar and potentially limit the upside of pair in the short term.


USD/JPY trades with mild losses below 155.00 on risk-aversion

USD/JPY trades with mild losses below 155.00 on risk-aversion

USD/JPY trades with mild losses near 154.65 on Wednesday during the early Asian trading hours. The robust US economy and sticky inflation data have triggered the expectation that the Fed might delay the easing cycle to September from June, which provides some support to the US Dollar.


Gold ascends but remains shy of testing $2,400 amid hawkish Fed remarks

Gold ascends but remains shy of testing $2,400 amid hawkish Fed remarks

Gold prices edged higher late in North American session, gaining 0.22% following a hawkish tilt by Fed Chair Jerome Powell. Economic data from the United States was mixed, though Monday’s Retail Sales report and Powell’s remarks kept US Treasury yields higher, capping the yellow metal’s advance.

Gold News Price Prediction: FET must hold above $1.70 for strength Price Prediction: FET must hold above $1.70 for strength is trading with a bearish bias. It comes as chatter about the proposed integration with the Ocean Protocol and the SIngularityNET ecosystem remains fresh.

Read more

UK CPI March Preview: Inflation pressures to dissipate further, adding to bets of BoE rate cuts

UK CPI March Preview: Inflation pressures to dissipate further, adding to bets of BoE rate cuts

The March UK CPI report will be released by the Office for National Statistics on Wednesday. United Kingdom’s headline and core annual inflation are set to ease in March. The UK CPI report could hint at the BoE’s interest rate cut, rocking the Pound Sterling.

Read more