Gold Price Forecast: XAUUSD creeps lower toward $1750s on Fed hawkish remarks
- Hawkish commentary by Federal Reserve officials undermines Gold Prices.
- Unemployment claims in the United States diminished compared to last week’s data.
- The US housing market continues to deteriorate as the Federal Reserve aggressively tightens.
- Gold sliding below $1753 would pave the way toward the 100-DMA.
Gold Price drops, eyeing a test of the weekly lows around $1753, following hawkish Federal Reserve (Fed) commentary, amidst a tranche of United States (US) economic data released that underpinned the US Dollar (USD). Also, a jump in US Treasury bond yields weighed on the yellow metal. At the time of writing, XAUUSD is trading at $1759.40, below its opening price by 0.80%, after hitting a daily high of $1774.81.
Federal Reserve’s hawkish commentary undermined XAUUSD
Sentiment shifted sour as Fed policymakers emphasized the need to tackle inflation, led by the St. Louis Fed President James Bullard. Bullard said, “Even under these generous assumptions, the policy rate is not yet in a zone that may be considered sufficiently restrictive.” In his presentation, he showed charts that showed rates might be “sufficiently restrictive” at around 5% to 7% and called his colleagues to raise rates further if they’re to achieve the Fed’s 2% goal.
US Initial Jobless Claims retraced
Data-wise, a busy economic calendar in the United States would entertain Gold traders, led by unemployment claims and housing data. Initial Jobless Claims for the week ended on November 12 dropped 222K, below estimates of 225K and the previous week’s 226K. Contrarily Continuing Claims rose 13K, to 1.51 million, in the week ended on November 5, increasing for the fifth straight week, an uptrend signing that Americans are out of work for longer.
The US housing market continues to cool down
In the housing market segment, Housing Starts for October tumbled, shrinking 4.2% below September’s 1.3% contraction, as further interest-rate hikes by the Fed keep pouring cold water into an already battered housing market. Building Permits decreased by 2.4%, while the previous month’s data was upward reviewed to a 1.4% increase.
The US Dollar Index, a gauge of the buck’s value against a basket of peers, remains above its opening price by 0.62%, at 106.948, snapping two days of consecutive losses. The US 10-year Treasury bond yield, a headwind for the non-yielding metal, jumps nine bps, at 3.781%, after hitting a weekly low of 3.671%.
Gold Price Analysis: Technical outlook
From a technical perspective, the XAUUSD remains neutral-to-upward biased, struggling to crack the $1787 barrier. The XAUUSD drop toward the weekly low at $1753, exposing the yellow metal to selling pressure. The Relative Strength Index (RSI), exiting from oversold conditions, cements the sellers’ case to push prices lower. Therefore, the XAUUSD’s first support would be the weekly low at $1753, followed by the September 12 swing high at $1735.10, and immediately followed by the 100-day Exponential Moving Average (EMA).
