Gold Price Forecast: XAU/USD bulls testing bears’ commitment at crucial daily resistance, US consumer data eyed

Hotter US Consumer Price Index (CPI) and rising bets for earlier Fed rate hike-driven sell-off in the Treasury yields extended into Thursday, which dragged the dollar lower while pushing gold price briefly above the $1800 mark. However, gold’s bullish potential was limited by strong third-quarter earnings reports from top American banks, which lifted the overall market mood, eclipsing the inflationary risks-induced global economic worries. Weaker than expected US PPI data also helped ease the concerns over rising inflation. Gold price gained 1% on the day, reaching fresh one-month tops at $1800.62.

Attention now turns towards the critical US consumer-centric data, with Retail Sales and Michigan Consumer Sentiment on the cards, as an eventful week draws to an end. The US Retail Sales are expected to drop 0.2% MoM in September while the core figure is seen lower at 0.5%. Below-forecast American data is likely to add to the corrective pullback in the US dollar, as the Treasury yields could resume the downside. That said, gold price will continue to remain at the mercy of the dynamics in the yields and the persisting risk sentiment.

Gold Price Chart - Technical outlook

Gold: Daily chart

Gold price is meandering in a narrow range below $1800 so far this Friday, awaiting the US economic releases for the next big move.

Although the path of least resistance appears to the upside for gold price, especially after the 14-day Relative Strength Index (RSI) flipped to the positive territory, the bulls await a daily closing above the 200-Daily Moving Average (DMA) at $1796 to unleash further upside. At that level, the bearish 100-DMA hurdle coincides.

The next relevant target is seen near $1807-$1809, mid-September highs. The September highs of $1834 will be in sight if gold bulls gain conviction.

Any pullback in the price would call for a test of the horizontal 50-DMA support $1777, below which the previous important resistance-turned-support of the mildly bullish 21-DMA at $1761 will get tested.

All in all, the additional upside in gold price will depend on a weekly closing above the key 200-DMA resistance, which is a widely watched technical indicator.