Gold Price Forecast: XAU/USD remains steady around $1,670 ahead of FOMC minutes

• Gold holds around 1670$ even after US PPI data.
• Yellow metal stays firm despite dollar’s strength and silver slide.
• Market participants turn attention to FOMC minutes ahead of Thursday US CPI numbers.

Gold continues to trade around $1,670 as it has been the case since the beginning of the European session. It is moving sideways after US PPI numbers and ahead of the FOMC minutes.

Earlier XAU/USD tested the critical support around $1,660. It held above and rose to $1,675 hitting a daily high before stabilizing around $1,670. It is modestly higher for the day, rising after a five-day losing streak.

Following the release of the US Producer Price Index gold approached daily lows but it quickly bounced back to the upside. The PPI rose 0.4% in September, above the 0.2% of market consensus. The annual rate fell from 8.7% to 8.5%. The greenback gained momentum across the board after the numbers, but just for a few minutes. It continues to move sideways, with mixed results.  

Market participants await the FOMC minutes for new clues about the trajectory of US monetary policy. The document will be released at 18:00 GMT. It could trigger volatility if it contains surprises. A hawkish Fed continues to be a critical support for the dollar as it keeps boosting US yields.  The next FOMC meeting is in November and another 75 basis points rate hike seems likely according to current market pricing.

Despite higher inflation numbers and the decline in silver and crude oil, gold is still up for the day. A break under $1,660 should open the doors to more losses. On the upside, a consolidation above $1,680 would be a positive technical development for bulls. Silver trades under $19.00, at the lowest levels since late September.

Technical levels