CFD Markets News and Forecasts — 26-11-2023

• Gold price hovers around the $2,000 psychological mark on the USD weakness.
• The private sector in the US continued to grow at a slower pace in early November.
• US Gross Domestic Product (GDP) and Personal Consumption Expenditure (PCE) inflation figures will be in the spotlight this week.

Gold price (XAU/USD) holds above $2,000 during the early Asian trading hours on Monday. Yellow metal's rally is fueled by expectations that the US Federal Reserve (Fed) would not raise the interest rate further. At press time, the gold price is trading near $2,001, losing 0.04% on the day.

Meanwhile, the US Dollar Index (DXY), an index of the value of the USD measured against a basket of six world currencies, declined to the lowest level since September at 103.40. That being said, a weaker USD boosts USD-denominated gold.

The private sector in the US continued to grow at a slower pace in early November. The S&P Global Composite PMI remained unchanged at 50.7. In the same period, the Manufacturing PMI fell to 49.4 from 50.0, worse than the expectation of 49.8. The Services PMI improved modestly to 50.8 from the previous reading of 50.6, above the consensus of 50.4.

The market believes that the Fed will deliver a less hawkish stance and place a bet that it will cut interest rates in the middle of next year, which is weakening the US Dollar.

Later this week, gold traders will keep an eye on the US Gross Domestic Product (GDP) on Wednesday and Personal Consumption Expenditure (PCE) inflation figures on Thursday. The Annualized US quarterly GDP is expected to expand from 4.9% to 5.0% while US PCE for October is estimated to drop from 0.4% to 0.1%.

• AUD/USD attracts some buyers on the weaker USD.
• The US flash S&P Global Composite PMI for November was unchanged at 50.7 vs 50.4 expected.
• RBA Governor Michele Bullock stated that tighter monetary policy is the appropriate reaction to demand-driven inflation.

The AUD/USD pair extends its upside during the early Asian session on Monday. The uptick of the pair is bolstered by the decline of the US dollar (USD) following the mixed S&P Global PMI data. The pair currently trades around 0.6583, down 0.08% on the day.

On Friday, the US flash S&P Global Composite PMI for November was unchanged at 50.7 versus the expectation of 50.4. Meanwhile, the Services PMI rose to 50.8 in November from 50.6 in October, above the market consensus of 50.4. The Manufacturing PMI eased to 49.4 from 50.0, worse than the 49.8 estimated. Economists anticipate overall economic growth to moderate considerably this quarter as the lag effects of the Federal Reserve's hike begin to have a greater impact. Markets are confident that the Fed will not raise the interest rate in December and expect four rate cuts in May of 2024. This, in turn, weighs on the USD and acts as a tailwind for the AUD/USD pair.

On the Aussie front, the hawkish stance from the Reserve Bank of Australia (RBA) boosts the Australian Dollar (AUD). RBA Governor Michele Bullock said tighter monetary policy is the appropriate reaction to demand-driven inflation.

Furthermore, the optimism that the Chinese government will continue to support the property sector has boosted the confidence of investors. That being said, the positive outlook about the Chinese economy lends some support to the China-proxy Aussie.

Looking ahead, market participants will monitor the Australian Retail Sales, RBA Bullock's speech, and the monthly Consumer Price Index (CPI) for October. On the US docket, the US housing data, Consumer Confidence, GDP, and ISM Manufacturing PMI will be released.