The gold price forecast indicates that XAU/USD has dipped to $2,320 after reaching two-week highs of $2,368 earlier. This decline is attributed to stronger-than-expected US Purchasing Managers Index (PMI) data released on Friday, which impacted the yellow metal’s value. This week, all eyes are on the final readings of the US Gross Domestic Product (GDP) and Core Personal Consumption Expenditures (PCE) Price Index.
US Economic Data
In June, US economic data showed mixed signals. According to recent S&P Global data, the advanced US Composite PMI for June rose to 54.6 from May’s 54.5, marking the highest level since April 2022. The Manufacturing PMI increased to 51.7 from May’s 51.3, exceeding the expected 51.0. Similarly, the Services PMI rose to 55.1 from 54.8, above the consensus of 53.7.
Federal Reserve’s Stance
The Federal Reserve officials have delayed the first interest rate cut this year. Tom Barkin, President of the Fed Bank of Richmond, mentioned the central bank’s preparedness with necessary measures, expecting to gain more insights in the coming months. Neel Kashkari, President of the Fed Bank of Minneapolis, projected that achieving the 2% inflation target could take one to two years. The robust US economic data and the Federal Reserve’s hawkish stance have strengthened the US dollar, subsequently weighing down the gold price forecast. Higher interest rates typically decrease the appeal of holding non-yielding assets like gold.
Geopolitical and Economic Uncertainty
Conversely, geopolitical and economic uncertainties could drive safe-haven flows towards gold. UN Secretary-General warned that a full-scale war between Israel and Hezbollah would be catastrophic. According to the BBC, several Palestinian children and women suffered casualties in Israeli air strikes on Gaza City, reported by Anadolu news agency. Such tensions may bolster the demand for gold in the short term.
XAU/USD Overview
| Metric | Value |
|---|---|
| Today’s last price | 2319.08 |
| Daily change | -3.04 |
| Daily change (%) | -0.13 |
| Daily open | 2322.12 |
| Daily SMA20 | 2333.85 |
| Daily SMA50 | 2343.42 |
| Daily SMA100 | 2241.26 |
| Daily SMA200 | 2112.4 |
| Previous daily high | 2368.79 |
| Previous daily low | 2316.84 |
| Previous weekly high | 2368.79 |
| Previous weekly low | 2306.66 |
| Previous monthly high | 2450.1 |
| Previous monthly low | 2277.31 |
| Daily Fibonacci 38.2% | 2336.68 |
| Daily Fibonacci 61.8% | 2348.95 |
| Daily pivot point S1 | 2303.04 |
| Daily pivot point S2 | 2283.97 |
| Daily pivot point S3 | 2251.09 |
| Daily pivot point R1 | 2354.99 |
| Daily pivot point R2 | 2387.87 |
| Daily pivot point R3 | 2406.94 |
In summary, the gold price forecast shows that XAU/USD remains under pressure due to stronger US PMI data and a hawkish Federal Reserve stance. However, ongoing geopolitical and economic uncertainties might provide some support to the yellow metal.
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