Gold Price Forecast: XAU/USD remains steady above $1,920, focus on US data

Gold price hovers above $1,920 during the Asian session on Monday. The prices of yellow metal snapped a losing streak on Friday as the US Dollar (USD) trimmed its intraday gains, which could be attributed to the falling in the US Treasury yields.

However, US bond yields have rebounded, with the yield on the 10-year US Treasury note appreciating to 4.45%, a 0.50% increase by the press time.

Regarding the recent data from S&P Global, business activity in the United States (US) remained nearly unchanged in September. The S&P Global Manufacturing PMI improved to 48.9 from 47.9 the previous month, surpassing expecting a reading of 48.0.

However, the Services PMI declined to 50.2 from 50.5 in July, falling short of the anticipated reading of 50.6. The Composite reading, offering an overall view of business activity, was in line with estimates at 50.1 but slightly lower than August's 50.2 level.

US Dollar Index (DXY), measuring the Greenback's value against six major currencies, is struggling to gain momentum, hovering around 105.60 at the time of writing.

Furthermore, Boston Fed President Susan Collins has suggested that further tightening is possible but emphasized the need for patience. Additionally, US Federal Reserve (Fed) Governor Michelle W. Bowman echoed similar sentiments, asserting that more rate hikes are necessary to control inflation.

The rising interest rates increase the opportunity cost of investing in non-yielding assets, which implies a negative outlook for precious metals like Gold.

The Fed has emphasized the importance of maintaining higher interest rates for an extended period to bring inflation back to its 2% target. This stance has raised market expectations for at least one more 25-basis-point rate hike by the end of the year.

Additionally, the Fed's "dot plot" now suggests only two rate cuts in 2024, a reduction from the previous projection of four rate cuts.

In the upcoming week, the US economic calendar will include key data releases such as Consumer Confidence, Durable Goods Orders, Initial Jobless Claims, and the Core PCE, the Fed's preferred measure of inflation.

The annual figure for Core PCE is expected to drop from 4.2% to 3.9%. These figures could provide further direction for Gold prices.