Gold Price Forecast: XAU/USD displays lackluster performance above $1,660 ahead of US GDP data

• Gold price is juggling around $1,665.00 as investors await US GDP data.
• Positive market sentiment has punished US Treasury yields and the DXY.
• A decline in New Home Sales data has also weighed pressure on the DXY.

Gold price (XAU/USD) has turned sideways around $1,665.00 in the early Tokyo session as investors are awaiting the release of the US Gross Domestic Product (GDP) data. The precious metal witnessed a gradual decline in the late New York session after failing to sustain above $1,670.00.

Market sentiment remained upbeat despite the S&P500 failure to continue its three-day winning streak after tech-giant Microsoft (MSFT) provided weak guidance on sales growth. The US dollar index (DXY) witnessed a steep fall and dropped to near 109.50. Also, the 10-year US Treasury yields witnessed selling pressure and dropped to the psychological support of 4%.

Lower New Home Sales data against its prior release also weighed pressure on the DXY. The households have purchased 0.603M new houses vs. the prior release of 0.677M due to soaring interest obligations led by the extremely hawkish Federal Reserve (Fed)’s monetary policy.

Going forward, the US GDP data will hog the limelight. The annualized GDP is expected to improve significantly to 2.4% vs. a decline of 0.6% reported earlier. This week, the PMIs reported by S&P remained downbeat. Therefore, the placement of the GDP figures around the projections will be worth watching.

Gold technical analysis

On an hourly scale, the gold prices have corrected minutely after testing the supply zone placed in a narrow range of $1,671.17-1,672.70. The 20-period Exponential Moving Average (EMA) at $1,633.16 is acting as major support for the counter.

The Relative Strength Index (RSI) (14) has dropped from the bullish range of 60.00-80.00, however, the upside bias is still solid.

Gold hourly chart