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Gold Price Forecast: XAU/USD recovers US PMI-led losses but stays below $2,000

Gold price snaps the losing streak, trading higher around $1,970 per troy ounce during the Asian session on Wednesday. The price of the precious metal receives upward support due to the stable US Dollar (USD) post-trimming recent losses.

Moreover, being a non-interest-bearing asset, the opportunity cost of holding Gold eases, which could be attributed to the downbeat US Treasury yields.

However, the improved risk sentiment, with the postponement of Israel’s ground assault plan in Gaza diminished the shine of the precious metal regarded as a safe-haven asset.

The positive outlook is being reinforced by China’s plan to issue additional sovereign debt. Constructive dialogues between the United States and China during their initial economic working group meeting also contribute to the prevailing optimism.

The US Dollar Index (DXY) rebounded from monthly lows, hovering around 106.20, propelled by encouraging preliminary S&P Global PMI figures released on Tuesday.

The decline in US Treasury yields could exert downward pressure on the US Dollar (USD), with the 10-year yield standing at 4.82%.

US S&P Global Composite PMI showed growth in October, rising from 50.2 to 51.0. The Services PMI experienced an increase, reaching 50.9, while the Manufacturing PMI rose to 50.0. The manufacturing index has maintained a level above the 50-point threshold in the last six months, indicating a positive shift in that sector.

Investors will likely monitor the US Q3 Gross Domestic Product (GDP) on Thursday, with attention also on the US Core Personal Consumption Expenditures (PCE) data expected on Friday.

Source: fxstreet