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Gold Prices Fall on Positive Forex News from the US

Gold prices
Gold prices

Gold prices were unable to sustain their gains above $1,480.00 where the commodity hit five-week highs earlier last week. On Friday, XAUUSD opened at $1,478.22 and traded to an intraday high of $1,480.74. By the New York session close, the precious metal had settled a few cents below its open price at $1,477.83.

Positive US Data Weighs on Gold Prices

The dollar got stronger late into Friday’s trading when data from the US mostly came in as expected. The final version of the US’ third quarter GDP report did not post any changes to the 2.1% growth rate that was previously reported. The core PCE index also met expectations at 0.1%. Meanwhile, personal income was higher than anticipated at 0.5%. It was estimated that consumers only saw a 0.3% uptick in their incomes for the month of November.

US Data Due Today

For today, better-than-expected US data may fuel the dollar’s strength. At 1:30 pm GMT, durable goods orders for November is eyed at 0.2%. Meanwhile, orders excluding transportation that were placed with manufacturers during the month is seen at 1.5%. Meanwhile, new home sales is anticipated to show that there were 730,000 more homes sold this November compared to a year ago.

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Gold Price Outlook

On the weekly time frame, we can see that gold prices have pared some of their gains to the 38.2% Fib level (when you draw the Fibonacci retracement tool from the low of April 28 to the high of September 1). If support at this level will hold and there are enough buyers in the market, we could see XAUUSD rally to its year-to-date highs at $1,556.31.

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However, a look at the daily time frame shows that there is a confluence of resistance that gold bulls will need to overcome. For one, there is resistance at the 100 SMA. The area around $1,483.75 also seems to coincide with the falling trend line when you connect the lower highs of September 4, November 1, and December 12. If the dollar gets stronger in the next few trading days, gold prices could fall to near-term support around $1,444.90 where the commodity bottomed in November. If support does not hold at that level, gold prices could fall further to test the rising trend line on the weekly chart at $1,410.68 where it also coincides with the 50% Fib level.More content