Gold Price Forecast: XAU/USD bulls approach $1,967 ahead of United States Gross Domestic Product


  • Gold price takes the bids to renew nine-month high, up for the fourth consecutive day.
  • US Dollar weakness underpins XAU/USD upside amid cautious mood ahead of the key United States Gross Domestic Product.
  • Dovish bias surrounding the Fed contrasts with the hawkish outlook over ECB to weigh on USD and favor Gold buyers.
  • Convergence of six-week-old ascending trend line, March 2022 peak could test XAU/USD bulls.

Gold price (XAU/USD) holds onto the bullish bias for the fourth consecutive day as it rises to the fresh high since April 2022 to near $1,950 during early Thursday. In doing so, the precious metal cheers the broad-based US Dollar weakness ahead of the first readings of the United States' fourth quarter (Q4) Gross Domestic Product (GDP). It’s worth noting that the contrasting play between the hawkish concerns surrounding the European Central Bank (ECB) and the dovish bias over the US Federal Reserve (Fed) adds strength to the XAU/USD upside via the softer USD.

US Dollar weakness propels Gold price

US Dollar Index (DXY) remains on the back foot, bracing for the third weekly fall, as sellers attack the six-month low marked the last week around 101.30, close to 101.55 by the press time. Given the inverse relationship between the US Dollar and the Gold price, the yellow metal benefits from the lackluster USD.

It’s worth noting that hopes of a dovish Federal Open Market Committee (FOMC) grew stronger amid the Federal Reserve (Fed) policymakers’ two-week blackout and weighed on the US Dollar, which propelled XAU/USD. The reason could be linked to the previously downbeat US data surrounding wages for December and activities for January. “Traders broadly expect the Fed to increase rates by 25 basis points (bps) next Wednesday, a step down from a 50 bps increase in December,” said Reuters.

European Central Bank clues also play their role in fueling XAU/USD

Apart from the dovish Fed concerns, the hawkish comments from the European Central Bank (ECB) and the upbeat data from the bloc also weigh on the US Dollar and favor the Gold buyers. On Wednesday, Germany’s IFO Business Climate Index matched 90.2 forecasts for January versus 88.6 prior, but the Current Assessment eased from 94.4 to 94.1 versus 95.0 expected. Further, the IFO Expectations for the said month also came in higher-than-consensus 85.0 while rising to 86.4, compared to 83.2 previous readings.

That said, ECB Governing Council member Gabriel Makhlouf became the final policymaker from the bloc’s central bank to fire the hawkish shot, suggesting a 50 bps rate hike ahead of the one-week blackout pre-ECB. "We need to continue to increase rates at our meeting next week – by taking a similar step to our December decisions," said ECB’s Makhlouf. Makhlouf added that they need to increase rates again at the March meeting.

United States Gross Domestic Product is the key

Although the US Dollar weakness propels the Gold price, the XAU/USD bear’s further dominance depends upon the first readings of the US fourth quarter (Q4) Gross Domestic Product (GDP), expected to print annualized growth of 2.6% versus 3.2% prior. Also important to watch will be the US Durable Goods Orders for December and the Q4 Personal Consumption Expenditure (PCE) data. Should the scheduled data print upbeat outcomes, the Gold traders may get a reason to pare the latest gains.

Also read: US Gross Domestic Product Preview: Three reasons to expect a US Dollar-boosting outcome

Gold price technical analysis

Gold price justifies the previous day’s upside break of a fortnight-old ascending resistance line to refresh the multiday high. Adding strength to the bullish bias could be the metal’s sustained trading beyond the 10-Day Moving Average (DMA) and the bullish signals from the Moving Average Convergence and Divergence (MACD) indicator.

It should be noted, however, that the overbought conditions of the Relative Strength Index (RSI) line, placed at 14, appears to challenge the XAU/USD bulls. On the same line could be a convergence of the March 2022 peak and an upward-sloping trend line from December 13, 2022, close to $1,967.

If the Gold buyers cross the $1,967 hurdle, a run-up toward April 2022 high near $1,999 can’t be ruled out.

Alternatively, the immediate resistance-turned-support line, close to $1,943, restricts the nearby downside of the Gold price ahead of the 10-DMA level of $1,927.

Following that, the $1,900 round figure will precede the previous weekly low near $1,896 to act as the last defense of the XAU/USD buyers.

Overall, Gold remains bullish, but the upside room appears limited.

Gold price: Daily chart

Trend: Limited upside expected

Additional important levels

Overview
Today last price 1948.36
Today Daily Change 1.63
Today Daily Change % 0.08%
Today daily open 1946.73
 
Trends
Daily SMA20 1885.23
Daily SMA50 1822.32
Daily SMA100 1750.98
Daily SMA200 1775.61
 
Levels
Previous Daily High 1948.17
Previous Daily Low 1919.91
Previous Weekly High 1937.57
Previous Weekly Low 1896.63
Previous Monthly High 1833.38
Previous Monthly Low 1765.89
Daily Fibonacci 38.2% 1937.37
Daily Fibonacci 61.8% 1930.71
Daily Pivot Point S1 1928.37
Daily Pivot Point S2 1910.01
Daily Pivot Point S3 1900.11
Daily Pivot Point R1 1956.63
Daily Pivot Point R2 1966.53
Daily Pivot Point R3 1984.89

 

 

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended content

Editors’ Picks

AUD/USD extends the retreat to near 0.6650 as US Dollar finds footing

AUD/USD extends the retreat to near 0.6650 as US Dollar finds footing

AUD/USD is back in the red, testing 0.6650 in Friday's Asian trading. A renewed US Dollar uptick undermines the pair, even as risk sentiment remains in a sweeter spot. However, the downside appears limited amid the RBA's hawkish stance and hopes for more Chinese stimulus could act as a tailwind for the Aussie.

AUD/USD News
USD/JPY drops back below 153.00 after Japan's verbal intervention

USD/JPY drops back below 153.00 after Japan's verbal intervention

USD/JPY drops back below 153.00 early Friday, snapping the rebound. Japanese verbal intervention outweighs the upbeat market mood and the post-Fed US Dollar rebound, exerting a fresh bearish pressure on the pair. US sentiment data is next in focus. 

USD/JPY News
Gold price slides back below $2,700 mark amid modest USD strength

Gold price slides back below $2,700 mark amid modest USD strength

Gold price met with a fresh supply and eroded a part of the overnight recovery gains. The Trump trade optimism revives the USD demand and weighs on the precious metal. Retreating US bond yields and bets for additional Fed rate cuts could help limit losses.

Gold News
BTC touches new all-time high near $77,000 following Fed rate cut

BTC touches new all-time high near $77,000 following Fed rate cut

Bitcoin price rallied and reached a new all-time high of $76,849 following the US Federal Reserve’s 25 basis point rate cut. Ethereum and Ripple followed suit and closed above their key resistance levels, hinting at a possible rally ahead.

Read more
Outlook for the markets under Trump 2.0

Outlook for the markets under Trump 2.0

On November 5, the United States held presidential elections. Republican and former president Donald Trump won the elections surprisingly clearly. The Electoral College, which in fact elects the president, will meet on December 17, while the inauguration is scheduled for January 20, 2025.

Read more
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

Forex MAJORS

Cryptocurrencies

Signatures