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November 17, 2022

XAUUSD teases bears around $1,770

- Gold price remains pressured after reversing from three-month high the previous day.

- Mildly bid US Dollar, firmer Treasury yields favor XAUUSD bears amid sluggish sentiment.

- Downside break of fortnight-old bullish channel teases sellers.

Gold price (XAUUSD) holds onto the previous day’s bearish bias around $1,773 despite sluggish markets on early Thursday. The yellow metal’s latest weakness could be linked to the US Dollar’s rebound, as well as a technical breakdown.

US Dollar Index (DXY) snaps a two-day downtrend as it seesaws around 106.40 by the press time. In doing so, the greenback’s gauge versus six major currencies traces the recently firmer US Treasury yields. The benchmark US 10-year Treasury yields rose 1.2 basis points (bps) to 3.70% while printing the first positive in four days by the press time.

The upbeat prints of the US Retail Sales for October and mixed comments from the US Federal Reserve (Fed) policymakers seem to underpin the DXY’s latest rebound, which in turn weighs on the gold price.

That said, US Retail Sales growth rose by 1.3% MoM in October versus 1.0% expected and 0.0% prior. On the other hand, Kansas City Fed President Esther George and Fed Governor Christopher Waller both favored smaller increases in the benchmark rates going forward whereas San Francisco Fed President Mary Daly mentioned challenges to the US economic growth.

Elsewhere, the Covid woes in China and a tug of war between the US Republicans and Democrats in the Midterm Elections seem to keep the traders on their toes

While portraying the mood, the S&P 500 Futures print mild gains but the Asia-Pacific equities trace mixed by the press time.

Looking forward, the aforementioned risk catalysts may direct the gold price amid a lack of major data events ahead of the US Weekly Jobless Claims and Philadelphia Fed Manufacturing Survey for November.

Technical analysis

Gold price justifies the rejection of a two-week-long bullish channel by printing mild losses. Also keeping the sellers hopeful are bearish MACD signals and the RSI’s retreat from the overbought territory.

However, a one-week-old ascending support line near $1,767 restricts the quote’s immediate downside, a break of which could quickly drag the pair toward the 50-SMA level surrounding $1,737.

It’s worth noting, however, that the six-week-old horizontal support zone between $1,730 and $1,722 could challenge the XAUUSD bears afterward.

Read more: Best Currency Pairs To Trade Forex

Alternatively, an upside break of the $1,787 hurdle could reverse the latest bearish signal and direct gold buyers toward the $1,800 threshold. Following that, August month’s high near $1,808 could act as the last defense of the XAUUSD bears.

Trend: Pullback expected

Gold price: Four-hour chart

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