Friday brought a further steep decline in gold price after more factors added tailwinds to the greenback following yesterday’s upbeat retail sales and Philly Manufacturing Index data.
Heightened expectations that the Fed would go hawkish and rising bond yields shifted investment capital away from the non-yielding yellow metal to greater-yielding USD-based assets such as Treasuries.
Focus has shifted to the FOMC meeting scheduled for next week, with investors placing bets on the Fed potentially gearing towards an earlier rate tightening cycle. These expectations follow Thursday’s upbeat US Retail Sales data, which point to further economic recovery.
Gold Price Outlook
The decline in gold price completes the bearish flag pattern, with the price set to target the 1741.01 support level. This pivot is that stands between the bears and additional targets to the south at 1719.13 and 1699.43.
On the flip side, a bounce from the 1741.01 support following the completion of the bearish flag’s measured move retests 1763.30, which served as the intraday high. If bulls surmount this price mark, 1789.49 comes into the picture, with 1815.20 lining up ahead as a potential target if the advance continues.
Gold Price (XAU/USD) Outlook
