Gold Price Forecast: XAU/USD Bulls Move After Dovish FOMC Minutes

• Gold bulls spring into action around a dovish FOMC minute.
• The Thanksgiving holiday just around the corner is monopolizing the deals.

Gold had rallied as high as $1,753 following dovish Federal Open Market Committee minutes, but has since retested below $1,750 and is oscillating within the range of the move. The Thanksgiving holiday is just around the corner, which probably means there are fewer participants in the event.

However, the minutes show that a substantial majority of the participants in the November meeting judged that a slowdown in the pace of interest rate rises would still be appropriate. In other key statements, the minutes showed that a slower pace of rate hikes would allow the FOMC to better assess progress toward its targets, given the uncertain lags around monetary policy. Some participants stated that slowing the pace of rate hikes could reduce risks in the financial system; others, that the slowdown should wait for more progress in terms of inflation.

Prior to the release of the FOMC Minutes, US PMI data had given the dollar bears the upper hand. US economic data (including Durable Goods Orders, PMIs, Claims, New Home Sales and Final Michigan Sentiment) was strong for the most part, but the emphasis was on shocking result of the US manufacturing PMI, which fell short of expectations:

Consequently, the dollar index has fallen more than 1%, to 106, the lowest level since mid-August, as traders raise bets that the Fed will only raise interest rates by 50 basis points in December.

US dollar H1 chart

Gold Technical Analysis

The price has broken out towards the resistance and the bulls will look for a discount to the back of the trend line for a higher price going forward. With the Thanksgiving holiday, the markets have fewer participants and therefore little tracking so far.