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Gold (XAU) Daily Forecast: Prices Dip to $2,325; Eyes on US GDP Figures

By:
Arslan Ali
Updated: May 30, 2024, 06:26 GMT+00:00

Key Points:

  • Gold prices fell to $2,325 in Asian trade on Thursday, pressured by a stronger dollar.
  • Anticipation of U.S. economic readings weighs on gold prices amid rising U.S. Treasury yields.
  • Geopolitical tensions in the Middle East support gold as a safe-haven asset.
Gold - Chart

In this article:

Market Overview

Gold prices fell in Asian trade on Thursday, pressured by a stronger dollar and rising U.S. Treasury yields. This decline comes as traders await key economic data likely to influence interest rates. Gold (XAU/USD) is currently trading at $2,325.

Gold Faces Pressure from Stronger Dollar and Treasury Yields

The dollar rose to a two-week high, driven by concerns over prolonged high U.S. interest rates. This pushed benchmark U.S. Treasury yields higher, diverting investments away from gold. The yellow metal has lost its gains from earlier this week, driven lower by these economic pressures.

Upcoming Economic Data and Fed Rate Expectations

Anticipation of U.S. economic readings is weighing on gold prices. Revised first-quarter GDP data, due later on Thursday, is expected to show resilience in the economy, with a forecasted annual growth rate of 1.3%.

Additionally, the PCE price index, the Fed’s preferred inflation gauge, is expected to rise by 0.3% month-over-month and 2.8% year-over-year in April.

This data follows statements from Fed officials suggesting limited confidence in near-term rate cuts, reducing the likelihood of a September cut.

Geopolitical Tensions and Central Bank Demand

Despite the bearish outlook, ongoing geopolitical tensions in the Middle East could support gold as a safe-haven asset. The Israeli military’s recent actions and rising central bank demand are expected to limit gold’s downside in the near term.

Short-Term Forecast

Gold (XAU/USD) is currently trading at $2,325. Anticipation of US economic data, particularly GDP and PCE figures, will likely drive market sentiment. A break above $2,326 could signal bullish momentum, while below this level, bearish pressure may persist.

Gold Prices Forecast: Technical Analysis

Gold - Chart
Gold – Chart

About the Author

Arslan, a webinar speaker and derivatives analyst, has an MBA in Finance and MPhil in Behavioral Finance. He guides financial analysis, trading, and cryptocurrency forecasting. Expert in trading psychology and sentiment.

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