Gold Price Forecast: XAU/USD struggles around $1,760 as Fed’s rate slowdown poses a double-edged sword

2022-11-25 05:40 (GMT+0)
  • Gold price is facing hurdles while surpassing the immediate hurdle of $1,760.00.
  • Investors see Fed’s rate hike slowdown as a double-edged sword as core CPI has not shown a meaningful slowdown yet.
  • An improvement in US Durable Goods Orders poses a bullish filter for the core CPI data.

Gold price (XAU/USD) is facing barricades around the critical resistance of $1,760.00 in the early European session. The precious metal has refreshed its weekly high at $1,761.05, however, further upside seems capped despite a risk-on tone in the global markets.

The USD Index (DXY) is auctioning around its weekly support at 105.65 amid a sheer decline in safe-haven’s appeal. Meanwhile, S&P500 futures are behaving like a dead cat amid the holiday mood in the United States on account of Thanksgiving Day.

No doubt, the headline inflation numbers in the US economy have displayed signs of a decline, however, the core CPI numbers have not shown meaningful signs of slippage yet. Also, the US Durable Goods Orders data that was released this week showed improvement, which is a sign of acceleration in core inflation ahead.

Federal Reserve (Fed) policymakers are required to take significant precautions before making a strategic plan for December monetary policy meeting as a decision to a slowdown in the interest rate hike could be a double-edged sword for them.

Gold technical analysis

On an hourly scale, Gold price has displayed a steep recovery after testing the 38.2% Fibonacci retracement (plotted from November 3 low at $1,616.69 to November 15 high at $1,758.88) at $1,722.00. The precious metal has extended its recovery after testing the 20-period Exponential Moving Average (EMA) at $1,754.65.

Meanwhile, the Relative Strength Index (RSI) (14) has reclaimed the bullish range of 60.00-80.00, which indicates more upside ahead.

Gold hourly chart

Tag : Gold | XAUUSD | Fed | Inflation | DollarIndex

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