Gold Price Forecast: XAU/USD recovers US PMI-led losses but stays below $2,000
- Gold price recovers the recent losses on the stable US Dollar after recent gains.
- Downbeat US Bond yields could offer support for the precious metal.
- Israel's delay on ground assault plan in Gaza weakens the demand for safe-haven asset Gold.
- Solid US PMI data supported the US Dollar to rebound from the monthly low.
Gold price snaps the losing streak, trading higher around $1,970 per troy ounce during the Asian session on Wednesday. The price of the precious metal receives upward support due to the stable US Dollar (USD) post-trimming recent losses.
Moreover, being a non-interest-bearing asset, the opportunity cost of holding Gold eases, which could be attributed to the downbeat US Treasury yields.
However, the improved risk sentiment, with the postponement of Israel's ground assault plan in Gaza diminished the shine of the precious metal regarded as a safe-haven asset.
The positive outlook is being reinforced by China's plan to issue additional sovereign debt. Constructive dialogues between the United States and China during their initial economic working group meeting also contribute to the prevailing optimism.
The US Dollar Index (DXY) rebounded from monthly lows, hovering around 106.20, propelled by encouraging preliminary S&P Global PMI figures released on Tuesday.
The decline in US Treasury yields could exert downward pressure on the US Dollar (USD), with the 10-year yield standing at 4.82%.
US S&P Global Composite PMI showed growth in October, rising from 50.2 to 51.0. The Services PMI experienced an increase, reaching 50.9, while the Manufacturing PMI rose to 50.0. This marks the first time in the last six months that manufacturing has sustained a level at or above the 50-point threshold, signaling a positive shift in that sector.
Investors will likely monitor the US Q3 Gross Domestic Product (GDP) on Thursday, with attention also on the US Core Personal Consumption Expenditures (PCE) data expected on Friday.
(This story was corrected on October 25 at 09:56 GMT to say that the US Manufacturing PMI came in at or above 50 for the first time in six months. A previous version of the story said that the PMI had remained above 50 for the last six months.)
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
