Gold Price Forecast: XAU/USD extends its upside near the $2,000 barrier, US PCE data looms

Gold price (XAU/USD) holds positive ground for the third consecutive day during the early Asian session on Friday. That being said, the lower US Treasury bond yield acts as a tailwind for the precious metal. At the press time, gold price is adding 0.15% on the day to trade at $1,987.

Data released by the US Bureau of Economic Analysis on Thursday revealed that the preliminary US Gross Domestic Product (GDP) Annualized for the third quarter (Q3) showed an expansion of 4.9% from 2.1% growth in the previous reading. This figure came in better than the market consensus of 4.2%.

Meanwhile, the US Durable Goods Orders climbed 4.7% MoM in September from a 0.1% drop in August, above the expectations of 1.5%. The US Initial Jobless Claims for the week ending October 21 rose to 210K from the prior week's data of 200K, beating the consensus while continuing claims rose by 63,000, the highest reading since May.

US Treasury Secretary Janet Yellen stated that the recent rise in bond yields is unrelated to deficits and does not indicate an oncoming recession. Instead, it reflects the US economy's strength. However, the US Treasury bond yields edge lower on Friday. The 10-year bond yield stands at 4.86% after retracing from 5.00%. This, in turn, lift the gold price higher despite the stronger-than-expected economic data from the US.

Gold traders will take more cues from September’s US Core Personal Consumption Expenditures Price Index (PCE) on Friday. The monthly and annual Core figures are expected to rise 0.3% and 3.7%, respectively. Additionally, the US Consumer Inflation Expectation and Michigan Consumer Sentiment Index for October will be released. Next week, the Federal Open Market Committee (FOMC) meeting will be in the spotlight.

Gold (XAU/USD) Technical Outlook

From the technical perspective, gold price remains firm above the key 100- and 200-day on the daily chart, which hints that further upside looks favorable. The key upside barrier is seen at the $2,000 psychological round mark. On the downside, a low of October 25 at $1,965 acts as an initial support level.

Gold price daily Chart