Gold Steady Above $1,660 – US Fed Rate Hike Sentiment Keeping Gains Limited

The gold price is under pressure for the second day in a row, with sellers targeting crucial short-term support around $1,660 during Friday

Skerdian Meta•Friday, October 28, 2022•2 min read

Gold Steady Above $1,660 - US Fed Rate Hike Sentiment Keeping Gains Limited

The gold price is under pressure for the second day in a row, with sellers targeting crucial short-term support around $1,660 during Friday’s Asian session. As a result, GOLD justifies a stronger US dollar amid the risk-off mentality. Anxiety about the Fed’s favored inflation gauge, the US Core PCE Price Index for September, might put downward pressure on the metal.

Nonetheless, the US Dollar Index (DXY) recovered from a five-week low after the third-quarter GDP climbed 2.6% on an annualized basis, which was higher than predicted (Q3). Even yet, a fifth consecutive drop in private consumption tested Fed hawks, indicating that regulators are getting closer to their goal of slowing down private domestic demand, which could support easy rate hike negotiations for December at the Federal Open Market Committee (FOMC) meeting next week.

XAU/USD

As a result, gold bears struggle to retake control even as the DXY bounces from a multi-day low supported by robust US GDP. In other news, US 10-year Treasury rates fell to a two-week low on Thursday and are on track for their first weekly fall in 11 months as hawkish Fed bets fade. Despite the recent decline in numbers, equities had a good week, which drew XAU/USD investors despite the risk-off sentiment.

Moving on, a drop in US equities and recently higher yields aid XAU/USD bears ahead of the September Core PCE Price Index, which is predicted to jump to 5.2% from 4.9% before. It’s worth noting that a stronger print of the Fed’s favored inflation gauge might boost rates and hawkish Fed bets, which will benefit gold bears.

Gold Technical Outlook

Gold price traded negatively to test the key support base of $1,660 and has remained stable above it until now, indicating that the bullish trend is still in play. Gold’s uptrend is supported by the EMA50 that carries the price from below, reminding you that our next target is $1,686.40 while breaking $1,660.00 will halt the expected rise and press on the price to decline.

Today’s trading range is between $1,650.00 support and $1,686.00 resistance.

Today’s projected trend: Bullish

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.