• Gold prices see a recovery, achieving gains of 0.25%, driven by a reversal in US bond yields, with the 10-year note coupon dropping from a 16-year high of 4.51% to 4.44%.
• Federal Reserve officials express a cautious stance, emphasizing the need for patience despite the necessity for further rate hikes to control inflation.
• The US Dollar Index (DXY) continues to print modest gains, sitting at 105.56, potentially impacting gold’s rally, with
• Next week, US data includes Consumer Confidence, Durable Goods Orders, and Initial Jobless Claims to provide further direction.

Gold price recovers some ground after hitting a weekly low of $1913.99, though it remains shy of breaking solid resistance at around the 50-day moving average (DMA) at $1929.79. Factors like dropping US T-bond yields and an upbeat market sentiment drive XAU/USD’s price toward the current spot at $1924.56, achieving gains of 0.25%.

Gold price nudges upwards despite a firm US Dollar

XAU/USD prices is being driven up by the reversal in US bond yields. The US 10-year benchmark note coupon reversed from a 16-year high of 4.51% towards 4.44%. Consequently, US real yields are edging lower from five basis points from 2.11% to 2.06%.

In the meantime, Federal Reserve officials had turned cautiously, led by Boston and San Francisco Fed Presidents Susan Collins and Mary Daly, stressing that although inflation is cooling down and further rate hikes would be needed, the Fed must be patient. Fed Governor Michelle Bowman commented that more increases are needed to control inflation.

Data-wise, S&P Global announced the final PMI readings in the United States (US). Manufacturing PMI improved to 48.9 but stood at recessionary territory. Contrarily, Services and Composite PMI showed signs of losing steam, though it expanded but continued to aim towards the 50 expansion/contraction threshold.

Meanwhile, the US Dollar Index prints modest gains of 0.17%, stalling Gold’s rally. The DXY sits at 105.56, set to print solid gains for the tenth straight week.

On the US front, Consumer Confidence, Durable Goods Orders, Initial Jobless Claims, and the Fed’s preferred gauge for inflation the core PCE.

XAU/USD Price Analysis: Technical outlook

From a technical standpoint, the XAU/USD is set to continue to trade sideways, within the $1913-$1948 range, with most daily moving averages (DMAs) hovering around the current exchange rate. However, as the yellow metal remains below the 200-DMA, which sits at $1926.24, the path of least resistance is tilted to the downside. First support would be the September 21 low of $1913.99, followed by the September 14 $1901.11 swing low. Conversely if the non-yielding metal surpass the 100-DMA at $1941.86, a challenge of the $1950 mark is expected.