Gold Price Forecast: XAUUSD holds $1,700 support despite risk-off mood, US inflation eyed
- Gold price has sensed support around a $1,702.00 cushion despite negative market sentiment.
- The DXY recovered significantly to near 110.40 ahead of October’s inflation report.
- Core CPI figure will be of utmost importance as it has not displayed signs of exhaustion yet.
Gold price (XAUUSD) continuously picks bids around the immediate hurdle of $1,702.00 from Wednesday. The precious metal surrendered its entire Wednesday’s gains after the risk profile turned sour as investors underpinned the US dollar index (DXY) ahead of the US inflation event.
The S&P500 index was the most prominent victim as investors turned anxious ahead of the outcome of the mid-term elections in addition to October’s inflation report. A majority win of Republicans will trigger political instability as approval of bills and laws will have to take a tangled route. Meanwhile, the DXY recovered sharply after registering a fresh seven-week low at 109.35.
On Thursday, the US inflation figures will remain in the spotlight. As per the preliminary estimates, the headline US CPI will decline to 8.0% vs. the prior release of 8.2%. Thanks to the falling gasoline prices that are continuously weighing pressure on plain-vanilla Consumer Price Index (CPI) figures. Also, the core CPI is seen marginally lower at 6.5%. Investors will mainly focus on core CPI figures as the catalyst has not yet displayed signs of meaningful exhaustion.
Gold technical analysis
On an hourly scale, the gold price oscillates between $1,702.10-1,722.40 after a sheer upside move. The precious metal still holds the 50-period Exponential Moving Average (EMA) at $1,698.40, which signals that the upside is intact.
The Relative Strength Index (RSI) (14) has shifted into the 40.00-60.00 after remaining in the bullish range, indicating that the upside momentum has exhausted but doesn’t warrant a bearish reversal.
Gold hourly chart
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
