Gold Price Forecast: XAU/USD heads toward $1,800, with key United States data on tap

Gold price is consolidating the latest leg higher to fresh two-month highs near $1,780, as the United States Dollar (USD) wallows at multi-month troughs against its major peers. USD bears take a breather ahead of another set of critical United States economic data due later this Thursday.

United States Core PCE inflation, ISM Manufacturing PMI next of note

The persisting bearish undertone around the US Dollar remains supportive of the upbeat momentum in Gold price, as investors now turn their attention towards the critical United States data releases, the US Federal Reserve’s closely watched Core PCE Price Index and Manufacturing PMI from ISM. Both data are crucial to understanding the state of the American economy, which could influence the Fed’s monetary policy decision.

FXStreet’s Chief Analyst, Valeria Bednarik, noted: “Core PCE inflation, which excludes volatile food and energy prices, is expected to have risen by 0.3% MoM, while the annual reading is foreseen at 5%, easing from 5.1% in October.  On the other hand, the ISM Manufacturing PMI is expected to have fallen into contraction territory, from 50.2 in October to 49.8.”

“Signs of easing inflation will be encouraging but not a surprise. Neither will confirmation the economy has contracted. Still, a Manufacturing PMI below 50 would undoubtedly hit the US Dollar, while a better-than-anticipated figure could boost the battered American currency,” Valeria added.

On Wednesday, mixed United States JOLTS Job Openings, Q3 GDP second estimate and Pending Home Sales data did little to help the US Dollar preserve its intraday gains. There were 10.3 million available jobs last month, down from nearly 10.7 million in September, the latest monthly Job Openings and Labor Turnover Survey (JOLTS) showed on Wednesday. Meanwhile, Pending Home Sales, a forward-looking market indicator, declined for the fifth consecutive month in October, falling by 37% YoY.

Federal Reserve Chair Jerome Powell sends United States Dollar down

A fresh round of the US Dollar selling came through after Federal Reserve Chairman Jerome Powell spoke on the economic outlook, inflation, and the labor market at the Brooking Institution, in Washington DC. Powell delivered a clear message, signaling a 50 basis points (bps) rate hike next month. He said that it makes sense to moderate the pace of tightening, adding that slowing down at this point is a good way to balance risks. His comments triggered a risk rally on Wall Street and smashed the safe-haven US Dollar across the board in tandem with the US Treasury bond yields, providing the much-needed boost to Gold price.

Earlier on Wednesday, the US Dollar witnessed some gains on positions readjustment heading into the monthly close. The American Dollar experienced the worst month in decades last month amid expectations of a dovish Federal Reserve piviot.

China's reopening optimism adds to the US Dollar plight

The risk-on market profile, in the wake of China’s reopening optimism, also keeps the US Dollar bulls at bay. China loosened its COVID-19 restrictions in the city of Zhengzhou with a key Apple iPhone plant. Reuters reported that the giant Chinese cities of Guangzhou and Chongqing announced an easing of covid curbs on Wednesday. China’s most senior official in charge of its Covid response said on Thursday that the country faced a “new stage and mission” in pandemic controls, hinting at a potential softening to Beijing's zero-Covid policy.

Meanwhile, an unexpected increase in the Chinese Caixin Manufacturing PMI also helped the market mood. The Caixin China Manufacturing PMI rose to 49.4 in November vs. 48.9 expected and 49.2 previous.

Gold price technical outlook: Four-hour chart

Gold price confirmed an upside break from a symmetrical triangle after closing Wednesday above the falling trendline resistance, then at $1,759.

Bulls need to cross the $1,780 round figure on a sustained basis if they look to retest the three-month highs at $1,787. The next relevant upside target aligns at the $1,800 threshold. .

The Relative Strength Index (RSI) is pointing north toward the overbought territory, supporting the bullish potential.

Alternatively, the previous day’s low at $1,766 could limit any retracements from higher levels. A break below the latter could trigger a fresh downswing toward the triangle resistance-turned-support, now at $1,757.

The bullish 21-Simple Moving Averages (SMA) at $1,755 will challenge buyers’ commitments before testing the $1,750 psychological level.