Gold Price Forecast: XAU/USD extends its rally near $2,050 ahead of Chinese PMI data

• Gold price gains momentum to $2,045 despite the modest USD recovery.
• Cleveland Fed President Mester said whether further hikes are needed depends on the economy.
• US Gross Domestic Product Annualized for the third quarter (Q3) came in at 5.2% vs 4.9% prior, better than expected.
• China’s NBS PMI and US Core Personal Consumption Expenditure Price Index (PCE) will be crucial data to watch.

Gold price (XAU/USD) holds positive ground for the sixth consecutive day during the early Asian session on Thursday. A modest recovery of the US Dollar (USD) fails to drag the yellow metal lower. Gold price currently trades near $2,045, up 0.04% on the day.

Meanwhile, the US Dollar Index (DXY), a measure of the value of the USD against a weighted basket of currencies used by US trade partners, recovers modestly from the monthly lows to 102.85. The Treasury yields edge lower, with the 10-year yield standing at 4.259%.

Late Wednesday, Cleveland Federal Reserve (Fed) President Loretta Mester said that monetary policy is in a good place to assess incoming information on the economy and financial conditions. Mester did not close the door to more rate hikes but added that whether further hikes are needed depends on the economy.

About the data, the US Gross Domestic Product Annualized for the third quarter (Q3) came in at 5.2% versus 4.9% prior, better than the market expectation of 5.0%. The market is pricing a 25 basis points (bps) rate cut in May 2024 and seems to have abandoned the higher-for-longer rate narrative in the US.

China’s NBS Purchasing Managers Index (PMI) data on Thursday will be crucial figures to watch as it could impact the gold price. It’s worth noting that China is the world's largest gold producer and consumer and the stronger-than-expected data might boost the further upside in the precious metal. Chinese Manufacturing is estimated to grow to 49.7 while Services PMI figures are expected to improve to 51.1. On the US docket, the US weekly Jobless Claims, the Core Personal Consumption Expenditure Price Index (PCE) for October, the Chicago PMI, and Pending Home Sales will be due on Thursday.