The precious metal retreated marginally in recent trading, in part due to some profit-taking

Gold prices rallied amid a weaker dollar as fresh data out of the United States pointed at signs of slowing inflation, lifting hopes that the Federal Reserve would scale back on aggressive rate hikes. The precious metal scaled a 2.5-month high after US inflation eased further to pushed the greenback and Treasury yields sharply lower. US CPI fell to 7.7% year-over-year while estimated at 7.9% earlier. 

The USD index plunged to two-month lows around 107.70, staying on the defensive on Friday. The buck now needs to regain at least the 108.00 mark in order to shrug off some of the downside pressure from traders that have started betting on slower rate hikes by the Fed.

Against this backdrop, the XAUUSD pair jumped above $1,750 to extend the ascent towards the $1,765 zone on Friday. After peaking, the precious metal retreated marginally in recent trading, in part due to some profit-taking following an impressive rally. The bullion is likely to see more gains in the near term, with immediate uptrend intact. The next major target for gold bulls arrives around the $1,800 psychological level last seen in mid-August. Of note, the level is strengthened by a slightly descending 20-DMA. As such, the metal could need some extra catalyst to challenge this barrier.

In the immediate term, XAUUSD needs to hold above $1,750 in order to preserve recent gains and stay elevated. This nearest support zone is followed by the $1,730 region and the descending 100-DMA, today at $1,715. The bullion was last seen changing hands around $1,760, adding 0.31% on the day. In a wider picture, gold could bounce in November after seven months of gains in a row.


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