Gold Price Forecast: XAU/USD drops to fresh two-month low near $1,940 after US data

Gold price came under renewed bearish pressure on Thursday.
First-quarter US GDP growth revised higher to 1.3%.
10-year US Treasury bond yield is up more than 1% near 3.8%.

Eren Sengezer FXStreet

Gold price turned south and dropped to its weakest level since late March slightly below $1,945 on Thursday before staging a modest rebound. As of writing, XAU/USD was down 0.55% on the day at $1,945.

US yields rise on strong data

The US Bureau of Economic Analysis announced that it revised the annualized Gross Domestic Product (GDP) growth for the first quarter to 1.3% from the advance estimate of 1.1%. Additionally, the US Department of Labor's weekly report revealed that there were 229,000 initial claims for unemployment benefits in the week ending May 20, much lower than the market expectation of 245,000.

Boosted by the upbeat macroeconomic data releases, the benchmark 10-year US Treasury bond yield gained nearly 1% and reached 3.8% for the first time since the second week of March, weighing on the inversely-correlated XAU/USD.

According to the CME Group FedWatch Tool, markets are currently pricing in a less than 60% probability of the US Federal Reserve leaving its policy rate unchanged in June, compared to nearly 80% earlier this week.

Later in the session, April Pending Home Sales and Kansas Fed Manufacturing Activity data for May will be featured in the US economic docket. Investors will continue to pay close attention to fresh developments surrounding the debt-limit negotiations as well.

Technical levels to watch for

XAU/USD

Overview
Today last price	1943.69
Today Daily Change	-13.42
Today Daily Change %	-0.69
Today daily open	1957.11

Trends
Daily SMA20	2001.08
Daily SMA50	1992.02
Daily SMA100	1933.1
Daily SMA200	1828.59

Levels
Previous Daily High	1985.3
Previous Daily Low	1956.79
Previous Weekly High	2022.18
Previous Weekly Low	1952.01
Previous Monthly High	2048.75
Previous Monthly Low	1949.83
Daily Fibonacci 38.2%	1967.68
Daily Fibonacci 61.8%	1974.41
Daily Pivot Point S1	1947.5
Daily Pivot Point S2	1937.89
Daily Pivot Point S3	1918.99
Daily Pivot Point R1	1976.01
Daily Pivot Point R2	1994.91
Daily Pivot Point R3	2004.52

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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