- Upbeat data from the United States in October boosted the US dollar as gold fell.
- US Durable Good Orders came in better than expected amid a gloomy economic outlook.
- The US labor market continued to ease as Initial Jobless Claims show.
- In the short-term, XAU/USD is neutral but would turn upside if it regains $1750.
The price of gold recorded slight gains of 0.19% after the release of economic data from the United States (US), the busiest day of the current week’s calendar, which failed to support the US dollar (USD), ahead of the release of the Federal Reserve’s (Fed) Meeting Minutes around 18 :00 GMT. At the time of writing this article XAU/USD is trading at $1741 after hitting a daily high of $1745.77.
Durable Good Orders surged and supported the US dollar
Sentiment is mixed as Wall Street fluctuates between winners and losers. Data released by the US Department of Commerce (DoC) revealed that orders for durable goods jumped 1% in October compared to September’s 0.3%, pointing to consumer resilience at a time of high inflation, increased borrowing costs and a worsening condition. economic outlook. Digging into the report, core durable orders, which exclude transportation and aircraft, rose 0.5% month-on-month over the same period, well above September’s -0.9% contraction and expectations of no change.
The US labor market is starting to loosen
At the same time, the US Department of Labor (DoL) revealed that initial jobless claims for the week ended November 19 rose to 240,000, above estimates of 225,000, amid a period of high-tech company layoffs. Meanwhile, continuing claims climbed 48,000 to 1.55 million in the week ended Nov. 12, the most since March, and there are flickering signs that the labor market is easing.
XAU/USD wobbled on the data and hit a daily low of $1725.23 before recovering towards a daily high of $1747.69 and stabilizing around current spot prices. Meantime, US dollar index (DXY), an indicator of the value of the US dollar vs. six currencies, extended its losses by 0.51% to 106,600.
Federal Reserve officials vow to tame inflation as traders watch FOMC minutes
Elsewhere, Federal Reserve officials noted that the central bank’s primary goal is to reduce inflation to 2%, although they acknowledged that borrowing costs should come down. On Tuesday, Cleveland Fed President Loretta Mester said, “Maintaining price stability is a critical objective that will be achieved using all available means.” On Monday, Mester noted that she was open to a modest rate hike, though she stressed that a pause was off the table. She echoed some of San Francisco Fed President Mary Daly’s comments that the federal funds rate (FFR) needs to peak around 5%.
Later in the day, the US economic calendar will reveal the minutes of the Federal Reserve Open Market Committee (FOMC) meeting in November, which will be scrutinized by analysts. They look for clues about how high policymakers expect rates to rise, how many participants support that view, and how many support rate hikes.
Gold Price Analysis (XAU/USD): Technical Outlook
After falling to a new two-week low around $1725.23 and testing the August 22nd swing low of $1727.90, XAU/USD is experiencing a comeback as the spot price is back above $1740. Traders should be aware that the Relative Strength Index (RSI) has leveled off, although it remains in bullish territory, a resumption of the uptrend is in play.
If XAU/USD buyers reclaim $1750, the gold price may return to trading in the $1750-1760 area before launching an attack on $1800. On the other hand, failure to do so will expose XAU/USD to a decline towards the 100-day exponential moving average (EMA) at $1711.24, followed by a test of $1700.