Gold Price Forecast: XAU/USD recovers its losses above $1,910, eyes on US PMI data

• Gold price recovers some lost ground around $1,920 amid the USD demand.
• Hawkish comments from Federal Reserve (Fed) Chair Powell drags gold price lower.
• Investors will closely watch the preliminary US S&P Global/CIPS PMI data.

Gold price (XAU/USD) recovers its recent losses after retreating to a weekly low of $1,913 during the early Asian session on Friday. As of writing, XAU/USD was up 0.08% on the day at $1,921.62.

In a press conference on Wednesday, Federal Reserve (Fed) Chairman Jerome Powell reaffirmed the Fed's commitment to achieving 2% inflation. Powel added that the Fed is prepared to raise interest rates if necessary.

According to the Fed's most recent quarterly predictions, the benchmark overnight interest rate may be raised one more time this year to a peak range of 5.50% to 5.75%, and rates may be substantially tighter through 2024 than previously anticipated.

In addition, the Fed revised its Summary of Projections (SEP), indicating that Fed officials anticipate that interest rates will reach 5.1% by the end of 2024 (up from 4.6% previously). It’s worth noting that rising interest rates raise the opportunity cost of investing in non-yielding assets, implying a negative outlook for precious metals.

About the data, the US weekly Initial Jobless Claims dropping to 201K, the lowest level since January. Additionally, the Philly Fed dropped to -13.5 in September from 12.0 in the previous reading, worse-than-expected of -0.7.  Existing Home Sales fell to 4.04M MoM in August from the previous reading of 4.07M. 

Looking ahead, gold traders will keep an eye on the preliminary US S&P Global/CIPS PMI data for September due later on Friday. These figures could provide a clear direction for gold price.