Gold Price Forecast: XAU/USD gains traction above $1,980, US GDP eyed

• Gold price gains momentum above $1,980 despite higher US yields.
• US New Home Sales for September increased to 759,000 MoM, above the market expectation.
• Rising geopolitical tension in the Middle East might boost safe-haven assets like gold price.
• Traders await the US growth numbers for Q3, which is expected to show a 4.2% expansion.

Gold price (XAU/USD) extends its upside during the early Asian trading hours on Thursday. Despite higher US Treasury bond yields, the precious metal gains momentum on the risk aversion. At the press time, gold price is adding 0.21% on the day to trade at $1,983.

Meanwhile, the US Dollar Index (DXY), a measure of the value of USD against six other major currencies, surges to 106.55, the highest since last Friday. The US Treasury bond yields also edges higher on Thursday, with the 10-Y US Treasury yield climbing to 4.95%. This, in turn, might cap the upside of the non-yielding yellow metal.

The recent US economic data showed the US economy is gaining traction. The US New Home Sales for September increased to 759,000 MoM, above the market expectation of 680,000. On Tuesday, the US PMI data came in better than estimated. The flash Composite PMI for October climbed to 51.0 from 50.2. While, Manufacturing PMI surged to 50 and the Services PMI rose to 50.9, above the consensus.

Nonetheless, the rising geopolitical tension in the Middle East might boost safe-haven assets like gold price. Israel Prime Minister Benjamin Netanyahu stated on Wednesday that Israel is preparing a ground invasion of Gaza, but he declined to provide any specifics on the timing or other details regarding the operation.

Gold traders will closely monitor the preliminary estimate of the US Q3 Gross Domestic Product (GDP) on Thursday, which is expected to show a 4.2% expansion. Additionally, the weekly US Jobless Claims, and Durable Goods Orders will be released. On Friday, the US Core Personal Consumption Expenditure Index (PCE) will be due. Traders will take cues from these data and find trading opportunities around gold price (XAU/USD).