In a dynamic surge, the XAU/USD chart is tilting towards the $2,000 mark as spot Gold prices exhibit resilience following the release of strong US Gross Domestic Product (GDP) figures, indicating a robust US economy that may deter the Federal Reserve (Fed) from considering future rate cuts.
Despite a minor deviation in unemployment claims, the US economy continues to outperform expectations, signaling a lack of significant downturn indicators that will likely prompt the Fed to maintain higher interest rates for an extended period. The persistent strength of the US economy has dashed the hopes of investors expecting a swift return to rate cuts by the Fed.
The latest data reveals a 4.9% expansion in US GDP for the third quarter, surpassing the projected 4.2%, bolstering the outlook for the American economy. With the Personal Consumption Expenditure (PCE) Price Index for September expected to reflect an increase to 0.3% from the previous month’s 0.1%, investors closely monitor these indicators to gauge the potential timeline for the Fed to consider rate adjustments.
As the Fed’s current stance keeps interest rates steady until well into 2024, the market’s attention is fixated on the XAU/USD technical outlook. Gold prices are gearing up for a formidable attempt to reclaim the $2,000 threshold, showcasing a remarkable 10% rally from the lows of October, hovering near $1,810.
The ongoing struggle for XAU/USD bids to breach the medium-term price barrier around $1,980, previously a restraint on upward momentum in July, hints at the intense battle within the market. A successful breakthrough would position Gold to challenge the peak bids of 2023, hovering near $2,079.76 in May. Conversely, a bearish reversal could drive XAU/USD back towards the support of the 200-day Simple Moving Average (SMA) currently establishing a floor at $1,932.