Gold attracted some haven flows as a result of a softer tone in the equity markets.
The gold price (XAUUSD) receives new offers on Thursday. And appears to have halted its retracement decline from a one-week high near $1,975-1.976 set the previous day. A lower tone in US equities futures turns out to be a significant factor acting. As a tailwind for the safe-haven precious metal as the European session begins. Aside from that, rising consensus that the Federal Reser (Fed) is done raising interest rates provides. Additional support to the non-yielding yellow metal.
The US Dollar extends its overnight recovery from a two-month low, which should limit XAUUSD gains.
However, the steady rebound of the US Dollar (USD) from its lowest level since September 1. In the aftermath of lower US consumer inflation numbers may limit future increases for the Gold price. Retail sales in the United States declined less than predicted in October. Which, along with an upward revision of the previous month’s already higher estimate. Resulted in a positive bounce in US Treasury bond yields. This continues to strengthen the US dollar and should be considered before putting bullish bets on the XAUUSD.
Daily Market Movers: Gold price continues to benefit from the cautious market mood
The US Producer Price Index (PPI) decreased 0.5% in October, the greatest drop since April 2020. Furthermore, September data was revised downward to show the PPI increasing by 0.4% rather than 0.5%.
This follows the release of the US CPI report on Tuesday. Which revealed that consumer inflation was falling quicker than expected. Bolstering predictions that the Federal Reserve is done raising interest rates.
The subject line In October, US retail sales dipped for the first time in seven months. While the drop was less than predicted and was accompanied by an upward adjustment of September statistics. Which showed robust gains.
In an interview, San Francisco Fed President Mary Daly state don Wednesday, highlighted the doubt about whether the central bank has done enough to bring consumer prices back down to its 2% target.
Bets that the Federal Reserve would not raise interest rates further could weigh on the US dollar.
This muddled the picture for when the Fed will begin decreasing interest rates, which is seen as providing some support to the US Dollar and should help to keep the gold price from gaining significantly.
Market traders are now looking for a boost from the US economic calendar, which includes the release of Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, and Industrial Production statistics.
Aside from that, statements by prominent Fed officials will be analyzed for clues regarding the Fed’s near-term policy direction, which will help to provide short-term trading opportunities around the XAUUSD.
Technical Analysis:
The gold price may struggle to capitalize on its tiny intraday uptick.
From a technical standpoint, the one-week high reached on Wednesday in the $1,975-1,976 range currently appears to operate as an immediate barrier. A prolonged rise above $1,991-1,992 has the potential to push the gold price even closer to the $2,000 psychological threshold. The momentum might be extended towards a multi-month high, around $2,009-2,010, which if convincingly cleared will be considered as a new trigger for optimistic traders and pave the way for a further near-term appreciating advance.
On the other hand, the $1,955-1,950 region is expected to defend the immediate downside ahead of the 200-day Simple Moving Average (SMA), which is currently near $1,935.
This being carefully tracked by the intersection of the 100- and 50-day SMAs, around the $1,928-1,925 zone, below which the Gold price might become vulnerable and accelerate its decline towards the $1,900 round number.
