Gold Price Forecast: XAU/USD rises to all-time highs above $2,250, eyes on Chinese, US Manufacturing PMI data

Gold Price (XAU/USD) climbs to all-time highs of nearly $2,250 per troy ounce during the early Asian session on Monday. The yellow metal attracts some buyers amid the expectations of a Federal Reserve (Fed) pivot in the second half of 2024, the ongoing geopolitical tensions in the Middle East, and the hope for China's economic recovery. 

The expectation of easing monetary policy from major central banks might boost gold prices. Financial markets have priced in 68.5% odds of a quarter-point rate cut from The US Fed by June, according to the CME Fedwatch Tool. The Fed Chairman Jerome Powell said on Friday that the recent US inflation data was "along the lines of what we would like to see," and it kept the Fed's baseline for interest rate cuts this year intact. It’s worth noting that the lower interest rates might lift the gold price as gold becomes a better investment, considering it is a non-interest-bearing asset.

On Friday, the US Personal Consumption Expenditures Price Index (PCE) rose 2.5% YoY in February, in line with expectations. The monthly figure increased by 0.4% MoM in the same month, slightly below the market consensus. Additionally, the Core PCE, which excludes volatile food and energy prices, climbed 2.8% YoY and 0.3% MoM, aligning with market expectations. 

Furthermore, Hezbollah said on Sunday that it carried out seven attacks on Israeli troops and said one of its strikes targeted and destroyed newly developed spy equipment at al-Jardah near the Lebanese border. The rising tension in the Middle East might boost the safe-haven flows and benefit the gold price. 

Apart from this, the upbeat Chinese Purchasing Managers Index (PMI) data for March provides some support to the gold price. The National Bureau of Statistics (NBS) showed on Sunday that Chinese Manufacturing PMI improved to 50.8 in March from the previous reading of 49.1, while Non-Manufacturing PMI climbed to 53.0 in March versus 51.4 in February.

Moving on, traders will focus on China’s Caixin Manufacturing PMI for March, due on Monday. Also, the US ISM Manufacturing PMI. If the US PMI report shows a stronger-than-expected outcome, this could boost the US Dollar (USD) and cap the upside of the gold price in the near term.