Gold Price Forecast: Awaiting PCE Data Amid Bullish Signals
On Wednesday, the GOLD price (XAU/USD) saw a slight downturn, ending a two-day ascent that had reached a weekly high near $2,047. This pullback was influenced by a moderate increase in US Dollar demand, yet the sharp overnight decline in US stock markets helped mitigate losses for Gold, typically seen as a safe-haven asset. Overall, Gold has been hovering within a known trading range recently, poised for a significant catalyst to direct its next significant movement.
The forthcoming US Core Personal Consumption Expenditure (PCE) Price Index release on Friday is expected to significantly impact the Federal Reserve’s upcoming policy decisions, shaping the short-term path for Gold. Additionally, the anticipation of the US Federal Reserve initiating interest rate cuts by March 2024 has led to a decrease in US Treasury bond yields, affecting the USD and providing some support to Gold.
The likelihood of the Federal Reserve shifting from its current stringent stance early next year has positively influenced Gold prices. Expectations of a dovish Federal Reserve have brought down the yields of benchmark 10-year US government bonds to their lowest since July, thereby constraining the US Dollar. Despite efforts by Federal Reserve officials to temper expectations of rapid rate cuts in the coming year, their impact on the dollar has been minimal. Meanwhile, the US Consumer Confidence Index and an unexpected rise in US home sales have also contributed positively to the safe-haven metal.
Investors are now awaiting the final US GDP figures and other key economic data, with a keen eye on the Core PCE Price Index due this Friday, which is anticipated to inject volatility into the markets.
Gold Technical Outlook
From a technical perspective, GOLD is showing signs of a potential bullish trend. The metal has been trading in a lateral pattern, forming a double top pattern with a confirmation line at 2046.50. A breach of this level could signal a strong upward move, potentially exceeding the anticipated target of 2065.70 and aiming for the 2100.00 region. Supported by the EMA50, the bullish outlook remains valid as long as Gold stays above the 2016.90 mark, with today’s trading range expected to be between 2025.00 support and 2060.00 resistance.
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