GOLD PRICE FORECAST: STRONG US DOLLAR SIGNALS XAU/USD FALL TOWARDS SUB-$1,800 ZONE

Gold price remains pressured near two-month low, following consecutive four weekly declines.

Strong United States data underpin US Dollar strength and weigh on XAU/USD.

Firmer US Treasury bond yields, geopolitical fears also exert downside pressure on Gold price.

More clues of US inflation will be eyed for short-term XAU/USD direction.

Gold price (XAU/USD) stays depressed at the lowest levels in two-months after declining in the last five consecutive days, as well as printing four-week south-run. That said, the yellow metal begins the week’s trading on a back foot around $1,810 as bears cheer strong US Dollar amid upbeat United States economics. Among the US data, the Federal Reserve (Fed) favored inflation gauge offered major blow to the XAU/USD price.

Gold price slumps as US Dollar jumps

Gold price dropped in the last four consecutive weeks, as well as five days in a row, as the US Dollar marked the biggest weekly jump since September 2022. That said, the US Dollar Index (DXY) marked four-week uptrend by the end of Friday, grinding near the highest levels in seven weeks of late, on strong United States data, especially relating to the inflation, underpinned hawkish Federal Reserve concerns.

On Friday, the Personal Consumption Expenditures (PCE) Price Index rose to 5.4% YoY versus 5.3% prior and 4.9% market forecasts. Further, the more relevant Core PCE Price Index, known as Fed’s favorite inflation gauge, rose to 4.7% YoY, compared 4.6% prior and analysts' forecast of 4.3%.

Prior to that, the second reading of the Gross Domestic Product Annualized, better known as Real GDP, eased to 2.7% for the fourth quarter (Q4) versus 2.9% first forecasts. Further, the Personal Consumption Expenditure (PCE) Price and Core PCE for the said period rose to 3.7% and 4.3% QoQ versus 3.2% and 3.9% respective first estimations.

Additionally, the Chicago Fed National Activity Index improved to 0.23 in January from -0.46 (revised), versus 0.03 analysts’ estimates. On the same line, Initial Jobless Claims also eased to 192K for the week ended on February 17 from 195K (revised) prior, compared to 200K expected.