Gold price rebounds due to weak US GDP fueling rate cut speculation.

• Gold rebounds to $2,347 from daily lows of $2,322, up 0.41%.
• Slower US GDP growth and rising jobless claims weaken the Dollar.
• Traders are keeping an eye on April PCE inflation data, which could dictate the direction of XAU/USD.

Gold prices pared some of Wednesday's losses and rose 0.41% on Thursday after US Gross Domestic Product (GDP) showed the economy is slowing, reviving hopes that the Federal Reserve US (Fed) may cut rates later in the year.

XAU/USD is trading at $2,347, bouncing from daily lows of $2,322. The US 10-year bond yield collapsed almost seven basis points (bps) to 4.548%, while the Dollar followed the same trend. The DXY Dollar Index lost 0.43% to 104.67.

The US economy grew at a slower pace than in the fourth quarter of last year, indicating that higher funding costs set by the Fed are taking a toll on the economy. Meanwhile, the US Department of Labor revealed an increase in the number of people applying for unemployment benefits.

Recently, New York Fed President John Williams made headlines. He said monetary policy is well positioned, inflation is too high and he feels no urgency to cut interest rates. He added that inflation would reach the Fed's 2% target in early 2026.

Despite his hawkish stance, Gold prices barely heeded his words, remaining at current spot prices. The US housing market is also weakening, according to pending home sales data released by the National Association of Realtors.

For the remainder of the week, traders are anticipating the release of April's Personal Consumption Expenditure (PCE) Price Index, which is the Fed's preferred measure of inflation. The underlying PCE figure is expected to be 2.8% YoY, while headline PCE is projected to rise 0.3% MoM.

Daily moves and market drivers: Gold price rises as US Treasury yields retreat from multi-week highs

• Gold prices advance after bouncing from the 50-day SMA at $2,324.
• The US economic calendar includes the second estimate of Gross Domestic Product (GDP) for the first quarter of 2024, which showed a drop from 3.4% to 1.3% quarterly and was in line with analyst expectations.
• Initial jobless claims for the week ending May 25 rose to 219K, slightly above the consensus estimate of 218K and higher than the previous week's reading of 216K.
• Pending home sales for April fell from 3.6% to -7.7% mom and, on a year-over-year basis, plummeted -7.4% from a 0.1% expansion.
• Federal funds rate futures estimate just 27 basis points of interest rate cuts in 2024, according to data provided by the Chicago Board of Trade (CBOT).

Technical analysis: Gold price rises, but remains below $2,350

Gold's rally is set to continue, but buyers are struggling to break the psychological level of $2,350, which could pave the way for more gains. Short-term momentum favors sellers as the Relative Strength Index (RSI) remains bearish after falling below the 50 midline on Wednesday.

More gains could be anticipated if XAU/USD buyers reclaim the psychological mark of $2,350. The next target would be the $2,400 level, followed by the year-to-date high of $2,450 and then the $2,500 mark.

Conversely, if XAU/USD falls below the 50-day SMA at $2,321, that could pave the way to challenge the May 8 low of $2,303, followed by the May 3, $2,277.