Gold Price Forecast: XAU/USD prints bull flag ahead of United States Gross Domestic Product

• Gold price stays on the way to snap two-week uptrend, portrays bullish chart formation.
• United States data underpin US Dollar recovery but firmer sentiment keeps Gold buyers hopeful.
• US Gross Domestic Product is expected to confirm initial forecasts for third quarter (Q3), suggesting further upside for XAU/USD.
• Headlines surrounding Russia, China should be eyed for clear directions.

Gold price (XAU/USD) remains sidelined after retreating from a one-week high as traders await the key United States Gross Domestic Product (GDP) for the third quarter (Q3). Also challenging the yellow metal prices could be the mixed sentiment and year-end inaction. It’s worth noting, however, that a bullish chart formation on the hourly play keeps the XAU/USD bulls hopeful ahead of the US data.

Gold retreats as United States data underpinned US Dollar rebound

After initially refreshing the one-week high on the softer US Dollar, the Gold price reversed gains late Wednesday as the greenback cheered firmer data from the United States, as well as challenges to the sentiment.

That said, the US Conference Board’s Consumer Confidence jumped to the highest levels in eight months with the latest print of 108.3 for December, compared to the market forecasts of 101.0 and the revised prior readings of 101.40. It’s worth noting, however, that softer prints of the US Existing Home Sales for November, 4.09M MoM compared to 4.2M expected and 4.43M prior, challenged the greenback bulls afterward.

Following that, the US Dollar Index (DXY) printed the first daily gain in three even as it retreated to 104.22 by the end of Wednesday.

Given the US Dollar’s inverse relations with Gold, a firmer DXY weighed on the yellow metal price.

Risk catalysts also challenge XAU/USD bulls

In addition to the firmer data, challenges to the sentiment, mainly emanating from Russia and China, also seem to probe the Gold price.

Ukrainian President Volodymyr Zelensky is in the United States for a diplomatic visit. During the same, Us President Joe Biden said that the United States shares the same vision of a "free, independent, prosperous and secure Ukraine."

On the other hand, Russian President Vladimir Putin announced he would increase the country’s military potential.

Elsewhere, doubts about China’s Covid conditions also challenge the XAU/USD bulls. However, the dragon nation’s readiness for more stimulus probes the Gold bears.

Gold buyers keep eyes on US data, risk catalysts

Given the recent challenges to the Gold price, mainly due to the firmer US data and risk-negative headlines, today’s scheduled United States Gross Domestic Product (GDP) for the third quarter (Q3) and Core Personal Consumption Expenditure (PCE) details for the Q3 will be crucial for immediate directions. That said, the US GDP is expected to confirm 2.9% Annualized growth in Q3 while the Core PCE will also meet the initial forecasts of 4.6% QoQ during the stated period. As a result, the softer US numbers may allow the Gold buyers to return.

On the other hand, the Russia-Ukraine tussles are well-known and have been getting less attention of late, which in turn suggests no major negatives for Gold despite the latest downbeat headlines surrounding the geopolitical issues. Further, China’s readiness for more stimulus and opening of the economy could supersede the Covid woes and can favor the XAU/USD bulls.

Above all, the year-end holiday mood could challenge the Gold traders unless witnessing any major surprises.

Gold price technical analysis

Despite the latest retreat, Gold price prints a bull flag formation on the hourly chart.

However, bearish signals from the Moving Average Convergence and Divergence (MACD) indicator join the mostly steady Relative Strength Index (RSI), located at 14, to suggest XAU/USD’s further grinding towards the south.

As a result, the stated flag’s support line, near $1,810 by the press time, gains major attention, a break of which will not only defy the bullish chart pattern but could also drag the Gold price towards the 100-HMA level, close to $1,797 by the press time.

It’s worth noting, however, that an upward-sloping support line from Friday, near $1,795 at the latest, puts a floor under the Gold price.

On the flip side, a break of the $1,818 level will confirm the bull flag chart formation and can please the Gold buyers. Even so, an eight-day-old descending resistance line, around $1,820, could act as a validation point for the XAU/USD bull run.

Following that, XAU/USD run-up towards the theoretical target surrounding $1,855 can’t be ruled out.

In a case where the Gold price remains firmer past $1,855, June’s high near $1,880 will be in focus.

Overall, the Gold price remains on the buyer’s radar despite the latest retreat.

Gold price: Hourly chart

Trend: Limited downside expected