Gold Price Forecast: XAU/USD treads water around $1,900 despite firmer US Dollar
- Gold price trades higher but struggles to surpass the $1,900 mark.
- Risk aversion and China's economic woes are placing downward pressure on the price of gold.
- Declining US Treasury yields coupled with downbeat US data might exert pressure on the Greenback.
Gold price marginally extends its gains and successfully continues the winning streak for the third day. XAU/USD hovers around $1,900 per troy ounce during the Asian session on Wednesday, showing signs of recovery following four consecutive weeks of losses despite a firmer US Dollar (USD).
However, elevated risk aversion and concerns regarding China’s economy, are exerting pressure on the price of Gold. These elements could potentially impact the overall trajectory of Gold Prices.
Investors’ attention will be on China's economic woes and financial toil, any signs of further development in fiscal stimulus will be cheered up. According to Reuters, during the BRICS summit in South Africa on Tuesday, Chinese President Xi Jinping said that China's economy was resilient and that the fundamentals for its long-term growth remained unchanged.
The US Dollar Index (DXY), which measures the performance of the Greenback against the six major currencies, showed resilience on Tuesday and ended the day with a winning point. At the time of writing, the DXY is hovering around 103.50. The decrease in US Treasury yields and downbeat US Existing Home Sales could put the Greenback under pressure.
As said, data released on Tuesday revealed that US Existing Home Sales declined 2.2% in July to an annual rate of 4.07M, against the market consensus of 4.15M. The Richmond Fed Manufacturing Index improved in August from -9 to -7, in line with market expectations. The upcoming Jackson Hole annual symposium holds significant importance, primarily due to the speech by Fed Chair Powell scheduled for Friday.
Traders now look to the US economic docket, featuring preliminary S&P Global Manufacturing PMI for August and New Home Sales Change for July, later during the North American session. These datasets could provide insights, helping for placing fresh bets on the yellow metal.