Gold price tries to gain from the rising US dollar, US PPI data appears

During Friday’s Asian session, the gold price is trading with a negative bias.
A stronger US dollar and the expectation of a slower pace of Fed interest rate cuts are putting selling pressure on the gold price.
The US retail sales report for October will take center stage later on Friday.

The price of gold (XAU/USD) is struggling to gain ground near $2,570 on Friday, after rebounding from a two-month low in the previous session. The precious metal remains under selling pressure amid a powerful US dollar (USD) and growing uncertainty over the pace of interest rate cuts by the Federal Reserve (Fed). Expectations of higher inflation next year due to Donald Trump’s policies have led to fewer expected interest rate cuts, which has weighed on the yellow metal as higher interest rates make it less costly to hold unprofitable assets such as gold. attractive.

However, escalating tensions in the Middle East and the ongoing conflict between Ukraine and Russia may augment the price of gold, a classic sheltered asset. Looking ahead, investors will be monitoring October U.S. retail sales, which will be released on Friday. Data on the NY Empire State Industrial Production Index and Industrial Production Index will also be released. The Fed’s Susan Collins and John Williams will speak later in the day.

Gold price deepens losses as US dollar rises

Fed Chair Jerome Powell said Thursday that the recent performance of the U.S. economy has been “exceptionally strong,” giving the Fed room to cut interest rates at a cautious pace, according to Bloomberg.
Richmond Fed President Thomas Barkin said Thursday that while the Fed has made significant progress so far, there is still much work to be done to maintain momentum.
The US Bureau of Labor Statistics reported on Thursday that the US Producer Price Index (PPI) rose 2.4% y/y in October compared to the 1.9% augment recorded in September (adjusted from 1.8%). This result was better than market expectations of 2.3%.
Weekly U.S. unemployment claims for the week ending November 9 rose to 217,000. compared to the previous week of 221,000, below the estimate of 223,000.
Markets priced in almost 59.1% of the Fed’s 25 basis point (bps) rate cut at its December meeting, up from 75% last week, according to CME’s FedWatch Tool.

The gold price appears to be returning to its downtrend

During the day, the price of gold falls. The positive outlook for this precious metal appears uncertain on the daily time horizon as the price hovers around the key 100-day exponential moving average (EMA). The yellow metal could return to the downside if it manages to break below the 100-day EMA. Downside momentum cannot be ruled out as the 14-day relative strength index (RSI) is below the 50 midline near 33.60.

Consistent trading below the 100-day EMA could pave the way to $2,485, the September 8 low. An additional downside filter worth paying attention to is $2,353, the July 25 low. Long-term losses could push it down to the psychological level of $2,300.

On the other hand, the immediate resistance level for XAU/USD appears near the support-turned-resistance level at $2,665. A decisive break above this level could result in an augment to $2,750, the November 6 high.