Gold prices maintain intraday gains but stay below a one-week high as the US Dollar strengthens.

• On Thursday, gold prices received renewed buying interest, benefiting from a more subdued atmosphere in the equity markets.
• The US Dollar extends its rebound from a two-month low, potentially limiting the upside for XAU/USD.
• Anticipations that the Federal Reserve won’t pursue further interest rate hikes might pose a challenge for the Greenback.

On Thursday, the price of gold (XAU/USD) showed renewed positive movement and sustained modest intraday gains during the initial half of the European session. However, it stayed below the one-week high and reached around the $1,975-1,976 range on the preceding day. The precious metal benefits from a more cautious sentiment in US equity futures, prompting some safe-haven flows. Additionally, the anticipation that the Federal Reserve (Fed) has concluded its policy tightening efforts provides further support to the non-yielding gold.

However, an ongoing rebound in the US Dollar (USD), following its dip to the lowest level since September 1 following the softer US CPI report on Tuesday, restrains additional advances for the gold price. The October decline in US Retail Sales was less than anticipated, coupled with an upward adjustment to the prior month’s already robust figure, indicating the economy’s steady path for a soft landing. This reinforces the strength of the Greenback and advises prudence when considering bullish positions on XAU/USD.

The price of gold is supported by anticipations of a dovish stance from the Federal Reserve and a softer risk tone.

In October, the US Producer Price Index (PPI) experienced its most substantial decline since April 2020, dropping by 0.5%. Additionally, September’s data underwent a revision, revealing that the PPI increased by 0.4% instead of the previously reported 0.5%.

These developments follow Tuesday’s US Consumer Price Index (CPI) report, indicating a quicker-than-expected cooling of consumer inflation. This reinforces the belief that the Federal Reserve has concluded its interest rate hike cycle.

Conflicting messages emerging from high-level US-China discussions moderate investor interest in riskier assets and enhance demand for traditional safe-haven options, enabling the precious metal to extend its intraday climb.

Traders are currently anticipating fresh momentum from the upcoming US economic calendar, which includes the release of Weekly Initial Jobless Claims, the Philly Fed Manufacturing Index, and Industrial Production figures.

Additionally, remarks from influential Federal Reserve officials will be closely examined for insights into the immediate policy outlook, potentially creating short-term trading opportunities within XAU/USD.

Technical Analysis: The gold price remains under the weekly peak, approximately within the $1,975-1,976 range reached on Wednesday.

From a technical standpoint, the immediate obstacle appears to be the one-week high, situated in the $1,975-1,976 range reached on Wednesday. If there is sustained strength beyond this level, it could propel the gold price towards the $1,991-1,992 barrier, leading up to the psychological mark of $2,000. The momentum may extend toward a multi-month peak, around the $2,009-2,010 region. Clearing this level decisively would serve as a new catalyst for bullish traders, potentially opening the door for further short-term appreciation.

Conversely, there’s a likelihood that the $1,955-1,950 range will serve as a defense for the immediate downside, preceding the 200-day Simple Moving Average (SMA) positioned around the $1,935 mark. Subsequently, there’s a close convergence of the 100-day and the 50-day SMAs around the $1,928-1,925 area. If breached, this zone could render the gold price susceptible to acceleration in its descent toward the $1,900 psychological level.