Gold Price Forecast: XAU/USD awaits a range breakout and US Q1 GDP
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Subscribe to Premium- Gold price keeps yo-yo-ing near the 21-Day Moving Average ahead of key United States GDP data.
- Banking woes continue to cushion the US Dollar downside while weighing on Federal Reserve rate hike bets.
- The daily technical setup suggests a range breakout could be on the cards for the Gold price.
Gold price is attempting a tepid rebound while holding below the $2,000 mark early Thursday. Despite the renewed uptick, Gold price continues to remain within this week’s trading range, yo-yo-ing around $2,000, awaiting the high-impact preliminary release of the United States Gross Domestic Product (GDP) for the first quarter.
All eyes remain on the United States Gross Domestic Product data
The United States Dollar (USD) witnessed good two-way volatility but settled in the red on Wednesday, reversing most of Tuesday’s solid rebound. The Greenback resumed its sell-off amid an improvement in the market sentiment, reflected by the strong gains in the US S&P 500 futures, courtesy of the tech earnings boost from the United States. Earnings from Microsoft and Alphabet outpaced expectations and underpinned the broader market sentiment. The US Dollar declines helped Gold price regain the $2,000 threshold and extend gains further.
US banking sector jitters, however, played a spoilsport alongside the uptick in the US Treasury bond yields and dragged the Gold price lower in American trading. Mounting worries over the health of the American regional banks outweighed better-than-expected technology earnings. First Republic Bank shares tumbled a further 30% Wednesday after losing almost half their value the day before.
Resurfacing US banking sector concerns weighed further on the US Federal Reserve (Fed) rate hike bets. The probability of a 25 basis points Fed rate hike next week now stands at 73%, down from 76% seen on Wednesday. At the start of the week, markets priced in a nearly 90% chance of a 25 bps rate hike by the Federal Reserve in May.
Wall Street's main indices, excluding Nasdaq, tumbled amid growing recession fears spurred by the banking jitters, offering a much-needed reprieve to the US Dollar bulls. The pullback in the US Dollar from eight-day lows snapped the three-day recovery mode in the Gold price.
In Thursday’s trading so far, a sense of caution continues to persist as investors weigh the US banking sector fears and their impact on the Fed interest rates outlook. However, upbeat Meta Platforms earnings continue to comfort markets somewhat. META shares surged as much as 11% to their highest level since January 2022 in post-market trading after the company reported outstanding first-quarter earnings, raised its forecast for the current quarter and lowered its expense forecast.
Meanwhile, the US Dollar is resuming its decline ahead of the US advance Q1 Gross Domestic Product data due Thursday at 12:30 GMT. Gold price could extend the rebound beyond $2,000 if the US Dollar downside gathers steam on a sustained improvement in risk sentiment. US Q1 GDP preliminary figure is seen lower at 2.0% QoQ vs. 2.6% reported in the previous quarter. A weaker-than-expected GDP print will likely rekindle recession risks, boosting the safe-haven US Dollar at the expense of US stocks and Gold price. Although the rush to safety in the US government bonds could smash the US Treasury bond yields across the curve, limiting the downside in the Gold price.
Gold price technical analysis: Daily chart
Gold price extended the recovery momentum after recapturing the mildly bullish 21-Daily Moving Average (DMA) support-turned-resistance on Tuesday. It tested the $2,010 on Wednesday before sellers returned with a bang and knocked down the rates below the 21 DMA, now at $1,998.
Gold bulls are now reattempting the abovementioned barrier, with the 14-day Relative Strength Index (RSI) still defending the midline, keeping them hopeful.
If Gold bulls find acceptance above that level, another run toward the static resistance at $2,015 cannot be ruled out. The previous day’s high at $2,010 could be challenged ahead of that. Further up, Gold buyers will target the round figure of $2,020.
A weak US GDP print will reinforce recession fears, which could support the sentiment around the traditional safe-haven Gold price.
On the flip side, a failure to hold ground above the $2,000 psychological mark will revive the downside in the Gold price, with the focus back on the range lows near $1,975. However, the previous day’s low at $1,983 could come to the rescue of Gold buyers before.
A sustained break below the static support at $1,970 will fuel a fresh downtrend toward the intersection of the key psychological level and the April 3 low at $1,950.
To conclude, A big miss or an upside surprise in the US GDP print will likely pave the way for a decisive range breakout in the Gold price.
- Gold price keeps yo-yo-ing near the 21-Day Moving Average ahead of key United States GDP data.
- Banking woes continue to cushion the US Dollar downside while weighing on Federal Reserve rate hike bets.
- The daily technical setup suggests a range breakout could be on the cards for the Gold price.
Gold price is attempting a tepid rebound while holding below the $2,000 mark early Thursday. Despite the renewed uptick, Gold price continues to remain within this week’s trading range, yo-yo-ing around $2,000, awaiting the high-impact preliminary release of the United States Gross Domestic Product (GDP) for the first quarter.
All eyes remain on the United States Gross Domestic Product data
The United States Dollar (USD) witnessed good two-way volatility but settled in the red on Wednesday, reversing most of Tuesday’s solid rebound. The Greenback resumed its sell-off amid an improvement in the market sentiment, reflected by the strong gains in the US S&P 500 futures, courtesy of the tech earnings boost from the United States. Earnings from Microsoft and Alphabet outpaced expectations and underpinned the broader market sentiment. The US Dollar declines helped Gold price regain the $2,000 threshold and extend gains further.
US banking sector jitters, however, played a spoilsport alongside the uptick in the US Treasury bond yields and dragged the Gold price lower in American trading. Mounting worries over the health of the American regional banks outweighed better-than-expected technology earnings. First Republic Bank shares tumbled a further 30% Wednesday after losing almost half their value the day before.
Resurfacing US banking sector concerns weighed further on the US Federal Reserve (Fed) rate hike bets. The probability of a 25 basis points Fed rate hike next week now stands at 73%, down from 76% seen on Wednesday. At the start of the week, markets priced in a nearly 90% chance of a 25 bps rate hike by the Federal Reserve in May.
Wall Street's main indices, excluding Nasdaq, tumbled amid growing recession fears spurred by the banking jitters, offering a much-needed reprieve to the US Dollar bulls. The pullback in the US Dollar from eight-day lows snapped the three-day recovery mode in the Gold price.
In Thursday’s trading so far, a sense of caution continues to persist as investors weigh the US banking sector fears and their impact on the Fed interest rates outlook. However, upbeat Meta Platforms earnings continue to comfort markets somewhat. META shares surged as much as 11% to their highest level since January 2022 in post-market trading after the company reported outstanding first-quarter earnings, raised its forecast for the current quarter and lowered its expense forecast.
Meanwhile, the US Dollar is resuming its decline ahead of the US advance Q1 Gross Domestic Product data due Thursday at 12:30 GMT. Gold price could extend the rebound beyond $2,000 if the US Dollar downside gathers steam on a sustained improvement in risk sentiment. US Q1 GDP preliminary figure is seen lower at 2.0% QoQ vs. 2.6% reported in the previous quarter. A weaker-than-expected GDP print will likely rekindle recession risks, boosting the safe-haven US Dollar at the expense of US stocks and Gold price. Although the rush to safety in the US government bonds could smash the US Treasury bond yields across the curve, limiting the downside in the Gold price.
Gold price technical analysis: Daily chart
Gold price extended the recovery momentum after recapturing the mildly bullish 21-Daily Moving Average (DMA) support-turned-resistance on Tuesday. It tested the $2,010 on Wednesday before sellers returned with a bang and knocked down the rates below the 21 DMA, now at $1,998.
Gold bulls are now reattempting the abovementioned barrier, with the 14-day Relative Strength Index (RSI) still defending the midline, keeping them hopeful.
If Gold bulls find acceptance above that level, another run toward the static resistance at $2,015 cannot be ruled out. The previous day’s high at $2,010 could be challenged ahead of that. Further up, Gold buyers will target the round figure of $2,020.
A weak US GDP print will reinforce recession fears, which could support the sentiment around the traditional safe-haven Gold price.
On the flip side, a failure to hold ground above the $2,000 psychological mark will revive the downside in the Gold price, with the focus back on the range lows near $1,975. However, the previous day’s low at $1,983 could come to the rescue of Gold buyers before.
A sustained break below the static support at $1,970 will fuel a fresh downtrend toward the intersection of the key psychological level and the April 3 low at $1,950.
To conclude, A big miss or an upside surprise in the US GDP print will likely pave the way for a decisive range breakout in the Gold price.
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