Gold Price Forecast: XAU/USD steady post-US data, Middle East tussles

• Gold continues upward trend, influenced by geopolitical risks and US economic data.
• Strong US labor market and consumer confidence contrast could affect Fed officials rate cut forecasts.
• Investor attention on upcoming Fed announcement and Jerome Powell's press conference for future policy insights.

Gold prices remain in an uptrend following data from the United States (US), which emphasized a possible “soft landing” is achievable for the US economy. Although that should be negative for Gold, rising tensions in the Middle East underpins the non-yielding metal. At the time of writing, XAU/USD exchanges hands at $2036.50, virtually unchanged as the Asian Wednesday session begins.

XAU/USD stays firm as market participants awaits Powell

On Tuesday, bullion rose a modest 0.17%, sponsored by a fall in US Treasury bond yields, amid expectations that the Federal Reserve will keep rates unchanged on Wednesday’s meeting. After that, XAU/USD traders would await Fed Chairman Jerome Powell's press conference, looking for some forward guidance.

Data-wise, December’s JOLTS report was hot, indicating the tight labor market. Vacancies rose by 9.02 million, exceeding November’s data and forecasts of 8.75 million. At the same time, the Conference Board (CB) revealed that Consumer Confidence jumped the most in the last three months, rising to 114.8 in January from 108 in December, slightly below the consensus of 115.0. Dana Peterson, Chief Economist at the Conference Board, said, “January's increase in consumer confidence likely reflected slower inflation, anticipation of lower interest rates ahead, and generally favorable employment conditions as companies continue to hoard labor.”

In addition, XAU/USD gathered traction as the US 10-year Treasury bond yield dropped four basis points (bps) to 4.036%, a headwind for the Greenback. (USD). Consequently, the US Dollar Index (DXY), which tracks the buck’s performance against a basket of peers, slid 0.04% at 103.41.

Tomorrow, the US economic docket will feature the ADP Employment Change report and the Chicago PMI. At 19:00 GMT, the Fed will announce its monetary policy decision, followed by the Fed Chair Jerome Powell press conference.

XAU/USD Price Analysis: Technical outlook

The XAU/USD is neutrally biased, but the clearing of the 50-day moving average (DMA) has opened the door to challenge the psychological $2050.00 mark. Once cleared, buyers could push prices toward the December 28 high of  $2088.48, followed by the $2100 figure. In the outcome of sellers moving in and dragging prices below the 50-DMA at $2032.08, that would exacerbate a drop toward the January 25 swing low of $2009.66.