Gold Price Prediction: XAUUSD bears eye a break beneath crucial support. $1,750

Gold is trading flat at the open and straddles the $1,751 mark, having been lately pressured by the US Dollar, which posted its largest weekly gain in over a month as investors monitored rising bond yields and continued to wager on the Federal Reserve's interest rate hike path.

The US Dollar index DXY, which compares the dollar to a basket of major currencies, increased by 0.03% to 106.93 and has recouped the losses sustained when US inflation data prompted the indicator's steepest weekly drop since March 2020. Friday was the second consecutive day of rising Treasury yields, with the 10-year yield closing at 3.821%.

Last week's earlier-than-anticipated US Retail Sales data put cold water on rumors of a slowdown in interest rate hikes. In addition, hawkish comments from Fed officials such as James Bullard helped dispel rumors that the central bank was nearing a pause, boosting the US dollar and yields. Kit Juckes, an economist at Societe Generale, stated that the process of reducing positions prior to the end of the year may have begun in earnest. He said, "2022 was a near-perfect storm favorable to the U.S. dollar, as it surged due to greater GDP, higher interest rates, favorable terms of trade, and geopolitical concerns. The liquidity situation is deteriorating, and positions are being reduced.

In the coming week, the Fed's minutes will give insight on the FOMC's deliberations regarding the anticipated slowdown in rate hikes. "However, officials will also underline that the terminal rate is expected to increase relative to previous projections if the labor market continues to be extremely tight. In terms of the data, experts at TD Securities anticipate a minor decline in the manufacturing PMI in November, with the index remaining above 50.

Regarding gold, researchers stated, "money managers continued to grow their net long in gold markets aggressively. The aggressive increase in net length is more likely attributable to weakening downside momentum signals than to a growing belief in the Fed pivot narrative, given that trend following remains the dominant return engine among money managers trading in the yellow metal, as demonstrated by the strong correlation between CFTC money manager positioning and our independent estimates of CTA positioning.

"In fact, money managers significantly covered short positions while adding just marginally to their long positions. Given that non-CTA money managers were also likely net short, this lately popular story may have played a part in explaining the magnitude of short covering in this week's data, noted the analysts.