Gold remains capped below $4,050 as a hawkish Fed outlook and rising US Dollar strength threaten to confirm a bearish Double Top formation with a target of $3,911.
The Dollar is rallying across the board as October consumer inflation beat expectations on Tuesday, bolstering the case for a Fed rate hike in December. Hawkish remarks from Fed officials Paulson and Logan on Wednesday further fuelled the greenback, reviving its strength after a soft patch.
Gold trades around $4,050 after an impulsive reversal from the $4,150 area, with a bearish engulfing candle and a potential Double Top formation. Higher-than-expected October US consumer inflation and hawkish Fed speakers (two more quarter-point hikes called for) boost the Dollar and December rate-hike odds, weighing on the metal. A break below $4,023-$4,030 support would confirm the Double Top targeting around $3,911.
Gold (XAU/USD) faces downward pressure, trading near $4,050 as a stronger US Dollar limits recovery attempts. The greenback rallied following higher-than-expected October US inflation data and hawkish signals from Fed officials Paulson and Logan, who advocated for further rate hikes.
US consumer inflation for October came in above expectations, and two Fed officials backed further rate increases, raising expectations of a December Fed tightening move. This lifted the Dollar across the board.
Stronger-than-expected October US inflation lifted expectations of a Fed rate hike in December, pushing the US Dollar higher, which weighs on gold. Hawkish comments from two Fed presidents reinforced this pressure.
Support sits at $4,030 and $4,023; a clear break would confirm a double top and open the way toward roughly $3,970 and a measured target near $3,911. Resistance is at $4,066 and then the $4,150 area.