Gold Price Forecast: XAU/USD steady above $1,640 after pulling back from $1,657
- Gold finds support at $1,640 and remains positive on the day.
- Dollar's bullish reaction to US data has capped gold's recovery.
- Hopes of further Fed hawkishness have weighed on gold prices.
Gold futures reversal from session highs at $1,657 seen during the US morning trade has been contained at $1,640 before picking up to $1,650 area at the time of writing. On the daily chart, the precious metal remains 0.8% up, regaining lost ground after a three-day reversal.
US dollar’s rebound has capped gold’s recovery
The yellow metal went through a solid recovery during the Asian and European sessions, appreciating from $1,630 to session highs at $1,657, buoyed by the positive risk sentiment that sent the US dollar tumbling.
The market mood changed radically after the release of a series of bright US macroeconomic figures, that bolstered confidence in the US economic momentum, and cleared the path for further aggressive tightening by the Federal Reserve.
Manufacturing activity has been a positive surprise in October, with the US S&P and the ISM PMIs registering better than expected results. Beyond that, the JOLTS job openings have shown a solid increase in vacancies despite the Federal Reserve’s efforts to cool a historically tight labor market, which shows 1,9 jobs for every worker.
These figures have eased fears of an economic slowdown triggered by disappointing data released previously and refute the theory that the Federal Reserve might start to signal a slower monetary tightening in the months ahead.
Technical levels to watch