Title: Gold Price Forecast: XAUUSD to struggle on strong US CPI data

November 07,2022 08:06 AM ET

By:AnalysisWatch

Gold prices ended a volatile week in positive territory. Thursday's consumer price index (CPI) data could help gold prices determine their next near-term direction .The bulls are looking to maintain control ahead of key U.S. data.

"The U.S. midterm elections will be held on Tuesday, but it's hard to say what kind of impact the outcome could have on the performance of the U.S. dollar against its rivals or the overall mood of the market."

"The annual core CPI is forecast to rise to 6.9% in October from 6.6% in September. A strong inflation data set would remind investors of the Fed's willingness to stay on an aggressive tightening path and put gold back under downward pressure. On the other hand, a softer-than-expected core CPI reading would allow markets to reduce December rate hike bets by 75 basis points, giving a boost to XAUUSD in the near term.

"Friday's U.S. economic docket will include the November University of Michigan Consumer Sentiment Survey." Instead of the consumer confidence index, markets will turn their attention to the five-year consumer inflation expectations. "We could witness a direct market reaction to this data, with a reading at or above 3% weighing on the XAUUSD and vice versa."