Gold Price Forecast: XAUUSD down towards $1,750 on Fed remarks

• More aggressive comments from Federal Reserve officials undermine gold prices.
• Claims for unemployment benefits in the United States decreased compared to last week’s data.
• The US housing market continues to deteriorate as the Federal Reserve tightens its monetary policy.
• Gold dips below $1753 which would pave the way towards the 100 DMA.

the price of gold falls, looking for a test of weekly lows around $1,753, following comments from the Federal Reserve (Fed), amid a series of economic data releases from the United States (US) that propped up the dollar US (USD). Additionally, rising US Treasury yields weighed on the yellow metal. At time of writing, XAUUSD is trading at $1,759.40, down 0.80%, after hitting a daily high of $1,774.81.

The aggressively toned Fed comments undermined XAUUSD.

Sentiment soured as Fed policymakers stressed the need to rein in inflation, led by St. Louise Fed President James Bullard. Bullard said: “Even under these generous assumptions, the policy rate is still not in a zone that can be considered restrictive enough.” In his presentation, he held up charts showing that rates could be “sufficiently restrictive” around 5% or 7% and asked his colleagues to raise rates further if they wanted to meet the Fed’s 2% target.

Initial jobless claims in the US recede

On the data side, the US economic calendar will be awash with data, headlined by jobless claims and housing data. Initial jobless claims for the week ending Nov. 12 fell 222,000, below estimates of 225,000 and 226,000 the week before. By contrast, Continuation Claims rose 13,000, to 1.51 million, in the week ending Nov. 5, rising for the fifth week in a row, an upward trend that signals Americans are out of work for longer.

The US housing market continues to cool

In the housing market segment, October housing starts fell 4.2%, down from the 1.3% contraction in September, as further Fed rate hikes continue to throw cold water on an already battered housing market. Building permits decreased by 2.4%, while the data for the previous month was revised up to an increase of 1.4%.

The dollar index, a gauge of the dollar’s value against a basket of pairs, remains 0.62% above its opening price at 106.948, snapping two days of consecutive losses. The 10-year US Treasury yield, a headwind for the unprofitable metal, jumped nine basis points to 3,781%, after hitting a weekly low of 3,671%.

Gold Price Analysis: Technical Perspective

From a technical point of view, XAUUSD continues to have a neutral-upward bias, struggling to break above the $1,787 barrier. XAUUSD falls towards the weekly low of $1,753, exposing the yellow metal to selling pressure. The Relative Strength Index (RSI), coming out of oversold conditions, builds the case for sellers to push prices lower. Therefore, the first support for the XAUUSD would be the weekly low at $1,753, followed by the September 12 high at $1,735.10, and immediately followed by the 100-day EMA.