Gold Price Forecast: XAUUSD clings to $1,750 after dismal US housing data.

• The gold price will end the week with losses of almost 1%.
• US Existing Home Sales plunged sharply as the Federal Reserve continued to tighten monetary conditions.
• XAUUSD consolidates around $1,750, awaiting a new catalyst.

the price of gold fell across the board, thanks to a risk-off momentum, as European stocks turned negative while Wall Street is mixed. Other Federal Reserve (Fed) officials are making remarks, stressing the need to raise interest rates after two soft inflation reports in October. At the time of writing, XAUUSD is trading at $1,750, down 0.24%.

US Existing Home Sales Plummeted Due to Federal Reserve Monetary Policy

The National Association of Realtors in the United States reported that Existing Home Sales for October plunged a staggering 5.9%, below the 4.17% increase estimated by analysts. Home sales have fallen since February 2022 due to tightening of monetary conditions by the Federal Reserve, which is trying to rein in stubbornly high inflation, which has peaked at 9%. However, market sentiment remains positive throughout the session thanks to soft CPI and PPI reports for October.

Meanwhile, Fed policymakers reiterated their commitment to reduce inflation. The president of the Fed of San Luis, James Bullard, affirmed that interest rates are not “restrictive enough” and added that they would be if the federal funds rate (FFR) reached the zone of 5% to 5.25%. On Thursday, Minnesota Fed President Neil Kashkari commented that one month’s worth of data cannot be too convincing for the Fed, as the Fed must keep working until it is sure that inflation has stopped rising.

In price action, the Dollar Index, a gauge of the dollar’s value against a basket of six currencies, turned lower, down 0.07%, at 106.621, capping the slide in XAUUSD, which was threatening to extend below $1,750. US Treasury yields, specifically 10-year yields, are up two basis points, yielding 3.795%, putting a damper on the price of gold.

Gold (XAUUSD) Price Analysis: Technical Perspective

XAUUSD extends its losses to three straight days, turning negative on the week, shedding 0.85%. After rising to a fresh three-month high of $1,786.53 the unperformable metal is pulling back, ending the week around the $1,750 area. Although this is an important milestone, the XAUUSD was unable to take advantage of the weaker dollar. However, the slope of the Relative Strength Index (RSI) is turning south, suggesting that it is likely to consolidate in the $1,750-$1,800 area, as buyers regain momentum, to challenge the key psychological level $1,800.

Key resistance levels for the XAUUSD are found at $1,786 followed by $1,800, and the 200 day EMA at $1,802. XAUUSD support levels, on the other hand, are the August 22 swing low at $1,727.90, followed by $1,700.