Gold Price Forecast: XAU/USD holds below the $2,100 mark, a nine-week high, eyes on Chinese Services PMI data
- Gold price holds positive ground near $2,085.55 in Monday’s early Asian session.
- The US ISM Manufacturing PMI came in worse than expected, dropping to 47.8 in February from 49.1 in January.
- Fed’s Bostic said the central bank would cut rates in the summertime if the economy evolves as he expects.
Gold price (XAU/USD) rose to a nine-week high below the $2,100 mark during the early Asian trading hours on Monday. The downbeat US economic data on Friday triggered speculation about the interest rate cuts later this year. Additionally, the lower US Treasury yields added impetus to the rise in investor demand for the yellow metal. At press time, the gold price is trading at $2,085.55, unchanged for the day.
Data released from the Institute for Supply Management (ISM) on Friday showed that the US Manufacturing PMI dropped to 47.8 in February from 49.1 in the previous reading. The figure registered the 16th consecutive month that it remained below 50, which indicates a contraction in manufacturing.
The Federal Reserve (Fed) held the policy rate steady at the 5.25–5.50% range at its January meeting. Investors anticipated that the Fed to lower the rate by the end of 2024. Atlanta Fed President Raphael Bostic said he will monitor the longer-term trends and repeated his view that he sees the US central bank cutting rates in the summertime if the economy evolves as he expects. This, in turn, might improve the appeal of yellow metal and lift the price of gold.
Chinese Manufacturing sent mixed signals last month about the health of the economy. Investors will take more cues from the Chinese Caixin Services PMI for February on Tuesday. Additionally, the development surrounding the stimulus measure from the Chinese authorities could provide some support for the gold price.
Gold traders will keep an eye on the Chinese February Caixin Services PMI and the US ISM Services PMI on Tuesday. The Fed's Chair Jerome Powell testifies on Wednesday might offer some hints about a broad overview of the economy and monetary policy. On Friday, the US Nonfarm Payrolls (NFP) will be in the spotlight.
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