Gold Price Forecast: XAU/USD bulls lack conviction ahead of US GDP

• Gold price grinds lower after snapping two-day winning streak as bulls await the key United States statistics.
• Downbeat sentiment, mostly upbeat US data and steady Treasury bond yields prod XAU/USD bulls.
• Softer US Q1 Gross Domestic Product can enable Gold price to refresh 2023 high.

Gold price (XAU/USD) pares the first weekly gains in thee after snapping a two-day uptrend the previous day, depressed near $1,990 amid early Thursday. In doing so, the yellow metal justifies the market’s cautious mood ahead of the United States' first quarter (Q1) Gross Domestic Product (GDP), especially amid banking sector fears and recently mixed US data. That said, the US Dollar’s rebound during late Wednesday also exert downside pressure on the XAU/USD price. Furthermore, the ongoing voting on the bill suggesting an increase in the US debt ceiling adds to the market’s anxiety and keeps the Gold price on a back foot.

Gold price retreat amid escalating banking fears, pre-data anxiety

Gold price marked its first daily loss in three the previous day as market sentiment sours amid escalating fears from the First Republic Bank (FRB) after the troubled bank’s shares dropped another 20% on Wednesday, following a 50% slump the previous day. With this, the FRB is likely to face the limits on its Fed borrowings, which in turn spreads the ripple effect across the markets and weighs on the risk appetite and the XAU/USD.

Elsewhere, the cautious mood surrounding the US debt ceiling expiration also exerts downside pressure on the Gold price as most policymakers aren’t agreeing on the measures suggested by US President Joe Biden. That said, the US House of Representatives currently votes on a bill suggesting the increase in the debt ceiling and to cut government spending, known as the "Limit, Save, Grow Act". Although the passage of the bill is only one step closer to the final destination, any disappointment can add to the risk-off mood and exert more downside pressure on the Gold price.

On a different page, recently mixed US data also confuse the market players about the Federal Reserve’s (Fed) moves past May’s 0.25% rate hike.

On Wednesday, US Durable Goods Orders rose by 3.2% in March versus 0.8% expected and -1.2% prior. Further details suggest that the Durable Goods Orders ex Transportation and ex Defense also rose past market forecasts and previous readings in March. Before that, US Conference Board's Consumer Confidence Index edged lower to 101.3 for April, versus 104.0 prior. Additional details of the publication stated that the Present Situation Index ticked up to 151.1 during the said month from 148.9 prior whereas the Consumer Expectations Index dropped to 68.1 from 74 previous readings. Further, the one-year consumer inflation expectations eased to 6.2% in April from 6.3% in March.

Amid these plays, the US Dollar Index (DXY) dropped to the lowest levels in two weeks before paring some of the daily losses to end Wednesday’s trading near 101.43. Further, Wall Street closed mixed while the United States Treasury bond yields are mostly sidelined.

To sum up, the downbeat sentiment and recent pick-up in the DXY prods the Gold buyers ahead of the key United States Q1 GDP data, expected to ease to 2.0% on an annualized basis versus 2.6% prior.

Also read: Gold Price Forecast: Bears take control as concerns mount

Gold price technical analysis

Gold price remains depressed within a small trading area between an eight-day-old descending resistance line, around $2,010, and the $1,978 support confluence including the 200-bar Simple Moving Average (SMA) and a five-week-long upward-sloping trend line.

Given the steady Relative Strength Index (RSI) line, placed at 14, the latest grind is likely to continue. However, bullish signals from the Moving Average Convergence and Divergence (MACD) indicator suggest the XAU/USD’s further upside.

In that case, the Gold price needs a successful break of the $2,010 hurdle, which in turn could trigger the bullion’s run-up towards the monthly high of around $2,049.

Following that, the $2,050 round figure and 61.8% Fibonacci Expansion (FE) of the XAU/USD moves between March 15 and April 19, close to $2,070.

Meanwhile, the Gold price pullback remains elusive unless the quote stays beyond the $1,978 key support, a break of which won’t hesitate to direct the XAU/USD bears toward the late March swing low surrounding $1,934.

Overall, the Gold price remains on the bull’s radar as the United States Gross Domestic Product data loom.

Gold price: Four-hour chart

Trend: Further upside expected