Gold Price Forecast: XAU/USD climbs above $2,000 on the weaker Dollar, focus on the US GDP, PCE data
- Gold price hovers around the $2,000 psychological mark on the USD weakness.
- The private sector in the US continued to grow at a slower pace in early November.
- US Gross Domestic Product (GDP) and Personal Consumption Expenditure (PCE) inflation figures will be in the spotlight this week.
Gold price (XAU/USD) holds above $2,000 during the early Asian trading hours on Monday. Yellow metal’s rally is fueled by expectations that the US Federal Reserve (Fed) would not raise the interest rate further. At press time, the gold price is trading near $2,001, losing 0.04% on the day.
Meanwhile, the US Dollar Index (DXY), an index of the value of the USD measured against a basket of six world currencies, declined to the lowest level since September at 103.40. That being said, a weaker USD boosts USD-denominated gold.
The private sector in the US continued to grow at a slower pace in early November. The S&P Global Composite PMI remained unchanged at 50.7. In the same period, the Manufacturing PMI fell to 49.4 from 50.0, worse than the expectation of 49.8. The Services PMI improved modestly to 50.8 from the previous reading of 50.6, above the consensus of 50.4.
The market believes that the Fed will deliver a less hawkish stance and place a bet that it will cut interest rates in the middle of next year, which is weakening the US Dollar.
Later this week, gold traders will keep an eye on the US Gross Domestic Product (GDP) on Wednesday and Personal Consumption Expenditure (PCE) inflation figures on Thursday. The Annualized US quarterly GDP is expected to expand from 4.9% to 5.0% while US PCE for October is estimated to drop from 0.4% to 0.1%.