- Gold price is attempting to establish above $1,660.00 as yields dropped significantly.
- A decline in US PCE prices has trimmed hawkish Fed bets.
- The DXY accelerated on the better-than-projected growth rate reported in the third quarter report.
Gold price (XAU/USD) has turned sideways in the early Tokyo session after wild gyrations in New York. The precious metal is focusing on establishment above $1,660.00 despite a firmer recovery in the mighty US dollar index (DXY). The DXY has shrugged off pessimism after displaying an upbeat growth of the economy in the third quarter. From July to September, the economy reported a growth rate of 2.6% vs. the projections of 2.4%.
Meanwhile, the 10-year US Treasury yields have surrendered the critical support of 4% after a steep fall in US Personal Consumption Expenditure (PCE) Prices. The price change for consumer goods and services has dropped to 4.2% against the expectations of 7.9%, which trimmed the alpha generated by US government securities.
A decline in US PCE Prices has trimmed the odds of a bigger rate hike by the Federal Reserve (Fed). As per the CME FedWatch tool, the chances of the fourth consecutive 75 basis points (bps) rate hike announcement by the Federal Reserve (Fed) have dropped to 87.4%. Lower bets on hawkish Fed policy have supported the gold prices for stabilization.
Gold technical analysis
On an hourly scale, gold prices are displaying some corrective moves on the way toward the horizontal resistance plotted from October 11 high at $1,684.05. The correction seems healthy for gold bulls amid the absence of sheer selling pressure.
The 100-period Exponential Moving Average (EMA) at $1,657.32 has acted as major support for the counter.
While, the Relative Strength Index (RSI) (14) is oscillating in a 40.00-60.00 range, which indicates a consolidation ahead.
Gold hourly chart
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