Gold Price Forecast: XAU/USD wobbles around $1660 after upbeat US GDP data, ECB’s decision

• Gold price creeps lower as the US Dollar gains traction, despite falling US Treasury yields.
• The US Gross Domestic Product (GDP) accelerated and snapped two-quarters of consecutive contraction.
• The ECB lifted rates by 75 bps for the second consecutive meeting and boosted the greenback.

Gold prices fluctuate around $1660 following positive US economic data that keeps investors’ spirits high as US equities rise. Additionally, the greenback is recovering some ground after diving to a fresh five-week low at 109.535. At the time of writing, XAU/USD is trading at $1662, down by 0.25% from its opening price.

XAU/USD stalls at a key technical level on upbeat US growth data

XAU/USD remains oscillating around the $1660 area, though capped by the release of the US Advance Q3 GDP, which exceeded estimates, with the economy growing by 2.6%, above 2.4% estimates, entering into positive territory, following Q1 and Q2 contractions, which triggered a “technical recession,” as reported by the US Commerce Department.

The GDP got bolstered by the trade deficit narrowing sharply, adding 2.77% to GDP growth. Meanwhile, consumer spending slowed to a 1.4% rate, lower than Q2’s 2.0%, which could comfort Fed officials that demand is slowing down.

At the same time, the US Department of Labor reported that Unemployment claims for the week ending on October 22 rose by 217K, less than estimates of 220K, but more than the previous week, flashing that the labor market is easing.

Earlier, the European Central Bank (ECB) added another 75 bps rate hike to the deposit rate, which stands at 1.50%. The ECB President, Christine Lagarde, commented that the central bank would be data-dependent and take policy decisions “meeting by meeting.” The Euro sold off as a consequence, bolstering the US Dollar.

What to watch

The US economic docket will feature the US Federal Reserve’s favorite inflation gauge, the Core PCE, estimated at 0.5% MoM and 6.3% YoY, alongside the Consumer Sentiment and Pending Home Sales.

XAU/USD Price Forecast: Technical outlook

XAU/USD remains neutral to downward biased and faces solid resistance at the 20-day Exponential Moving Average (EMA) at $1663. If XAU buyers surpass, the latter XAU might challenge the 50-day EMA at $1686. Worth noting that the Relative Strength Index (RSI) is still in bearish territory; therefore

, sellers remain in charge. Key support lies at October 26 daily low at $1649.84, followed by the lows of the week around $1640.