Gold Price Forecast: XAU/USD recovers some lost ground above $2,020, Michigan sentiment data eyed
|- Gold price holds positive ground on the modest loss of USD.
- The stronger US economic data support the tighter-for-longer narrative around the Fed, which drags the gold price lower.
- US weekly Initial Jobless Claims fell to 187K last week versus 203K prior, above the consensus.
- Investors await the preliminary US Michigan Consumer Sentiment Index and Existing Home Sales, due on Friday.
Gold price (XAU/USD) recovers some lost ground during the early Asian session on Friday. The yellow metal rebounds as the US Dollar recovery stalls. Meanwhile, the US Dollar Index (DXY) hovers around 103.40. The US Treasury yield consolidates its gains, with the 10-year yield standing at 4.14%. The gold price currently trades near $2,024, up 0.09% on the day.
The resilient economic data in the US and the dovish stance of the Federal Reserve (Fed) weaken expectations of an early rate cut. Fed officials have not leaned towards endorsing an early rate cut, although the probability of interest rate cuts in March remains around 57%.
On Thursday, the US weekly Initial Jobless Claims fell to 187K for the week ending January 13 from 203K in the previous reading, better than the market expectation of 207K. Additionally, the January Philadelphia Fed Manufacturing Survey improved to -10.6 from -12.8 in December. The upbeat economic data support the tighter-for-longer narrative around the Fed, which might lift the Greenback and weigh on the USD-denominated gold.
Later on Friday, market players will focus on the preliminary US Michigan Consumer Sentiment Index and Existing Home Sales. Also, FOMC M. Daly (San Francisco) and M. Barr (Board of Governors) are set to speak later in the day.
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