Gold Price Forecast: XAU/USD slips toward $1930s on solid US GDP, traders eye PCE

Gold price retreats after hitting a nine-month high of $1949.16 and dips beneath the $1940 mark, following the release of the Gross Domestic Product (GDP) preliminary reading in the United States (US), amongst other data. Therefore, the XAU/USD is trading at 1933.40, below the opening price by 0.49%.

Q4’s Gross Domestic Product in the United States exceeded estimates

US equity futures rose on the release of Q4’s GDP, while Gold extended its losses. The US economy grew at a solid 2.9% QoQ, above estimates of 2.6%, while for Q3, it rose 3.2%, in data revealed by the US Commerce Department. Meanwhile, for the entire year of 2022, the US economy expanded by 2.1%, less than the 5.9% registered in 2021. The report highlighted that consumer spending was the main driver of economic growth at the start of Q4. Spending remains underpinned by a robust labor market and excess savings.

US unemployment claims dived, while Durable Good Orders rose

At the same time, the US Department of Labor (DoL) reported that Initial Jobless Claims for the week ending on January 21 dropped 6K to a seasonally adjusted 186K, below the estimates of 205 K. In other data, Durable Good Orders rebounded from a -2.1% contraction in November to 5.6% in December, as data for the US Commerce Department showed. However, core New Orders contracted by -0.1% MoM, aligned with the consensus, as the US economy feels the pain of 425 basis points (bps) of tightening by the US Federal Reserve (Fed).

Gold traders brace for Fed’s inflation gauge on Friday

Friday, the US economic docket will feature the US Federal Reserve preferred gauge for inflation, the Core Personal Consumption Expenditures (PCE), with the monthly reading estimated at 0.3%, while annually based is foreseen at 4.4%. Headline PCE data is expected at 0.1% Mom and 5.5% YoY.

Gold Technical Analysis

The XAU/USD daily chart remains upward biased, although an ongoing correction might push prices towards the $1900 psychological level or to the January 18 daily low of $1896.74. Below that support, the 20-day Exponential Moving Average (EMA) rests at $1894.44, which, once cleared, could send XAU/USD diving toward the January 11 pivot low of $1867.22. As an alternate scenario, if XAU/USD reclaims $1950, a move toward the psychological $2000 level is on the cards.