Gold Price Forecast: XAU/USD stable around $1,930, focus on US data

• The price of Gold maintains its position around $1,930 pending US economic data.
• The Fed’s hawkish stance on the path of interest rates bolsters the US Dollar (USD).
• Rising US bond yields are weakening non-yielding assets like Gold.

The price of Gold (XAU/USD) is around $1,930 during the early hours of the European session on Thursday. Investors seem to be focusing on upcoming US data following the US Federal Reserve’s (Fed) decision on monetary policy rates.

However, the Fed’s hawkish stance on the path of interest rates puts pressure on prices of the yellow metal.

As expected, the Federal Reserve opted to keep the current interest rate benchmarks at 5.5% during its meeting on Wednesday.

Additionally, the central bank is expected to carry out a further rate hike in 2023, in line with the Federal Open Market Committee’s (FOMC) projection of slightly higher inflation compared to its previous forecasts.

Hence, Federal Reserve officials unexpectedly revised their interest rate forecasts for 2024, increasing them from 4.6% to 5.1%. This adjustment played an important role in supporting the US Dollar (USD).

The DXY Dollar Index, which measures the performance of the greenback against six other major currencies, extends its gains and is trading at six-month highs, around 105.50.

Additionally, rising U.S. Treasury yields have contributed to the strength of the dollar and increased the opportunity cost of holding non-interest-bearing securities such as gold. The 10-year U.S. Treasury bond yield has risen up to 4.43%, the highest level since 2007.

Separately, in a press conference held immediately after Wednesday’s rate decision, Federal Reserve Chair Jerome Powell reiterated the Fed’s commitment to achieving its long-term inflation goal of 2%. Powell also suggested that the central bank is likely approaching the peak of its interest rate hiking cycle, but stressed that future policy decisions will be based on data-driven analysis.

Investors will closely monitor the upcoming United States (US) data releases scheduled for Thursday. Among these data are the weekly initial claims for unemployment benefits, the Philadelphia Fed manufacturing survey and the change in existing home sales.

These reports can provide valuable information on the health of the US labor market, the manufacturing sector, and the housing market, which are important factors influencing economic sentiment.