Gold Price Forecast: XAU/USD gains traction above $1,920, Chinese GDP eyed

Gold price (XAU/USD) holds positive ground around $1,925 during the early Asian trading hours on Wednesday. The uptick of the precious metal is supported by a correction of the US Dollar (USD). Meanwhile, the US Dollar Index (DXY), a measure of the value of the USD relative to a basket of foreign currencies, edges lower to 106.19. However, higher US Treasury yields might cap the downside of the USD.

On Tuesday, the US Census Bureau reported that the US Retail Sales for September rose by 0.7% MoM, above the market consensus of 0.3%. Retail Sales Control Group grew 0.6% MoM versus 0.2% prior. The data suggest strong momentum in consumption. Furthermore, US Industrial Production climbed 0.3% MoM, better than the market expectation of 0%. Lastly, Capacity Utilization improved to 79.7, stronger than the estimation. In response to the upbeat data, the Greenback edged higher but the impact was short-lived.

Minneapolis Federal Reserve Bank President Neel Kashkari on Tuesday said that inflation has taken considerably longer than expected and is still too high. Earlier, many Fed officials maintained their dovish stance. Philadelphia Fed President Patrick Harker said that the central bank should not create new pressures in the economy by increasing the cost of borrowing.

However, traders will take more cues from the Fed speakers on Wednesday, including Waller, Williams, and Bowman, which might offer some hints about further monetary policy paths. The hawkish remarks from the Fed officials might boost the USD demand and exert pressure on the US Dollar-denominated commodities, including the Gold price.

Furthermore, the geopolitical tension between Israel-Hamas remains in focus. On Tuesday, authorities in Gaza said an Israeli air attack on Tuesday killed 500 people at a hospital in the Palestinian territory, while Israel stated the damage was caused by a Palestinian attack, per Reuters. The escalating geopolitical tensions between Israel and Hamas could boost the demand for a traditional safe-haven asset like Gold.

Looking ahead, market participants will monitor the Chinese Gross Domestic Product (GDP) for the third quarter, Industrial Production, and Retail Sales due on Wednesday. The downbeat data could weigh on gold price lower as China is the world's largest gold producer and consumer. Traders will take cues from these events and find trading opportunities around the gold price.