Gold Price Forecast: XAU/USD wobbles around $3,750 as investors await US PCE Inflation data

• Gold price trades sideways around $3,750 ahead of the US PCE Inflation data for August.
• The US PCE inflation is expected to have grown steadily at an annual pace of 2.9%.
• Upbeat US Q2 GDP data has weighed on Fed dovish expectations.

Gold price (XAU/USD) trades in a tight range around $3,750 during the European trading session on Friday. The yellow metal consolidates as investors await the United States (US) Personal Consumption Expenditure Price Index (PCE) data for August, which will be published at 12:30 GMT.

Investors will closely track the US inflation data to get cues about the pace at which the Federal Reserve (Fed) will reduce interest rates in the remainder of the year, with officials expressing that the monetary policy path will remain on the downside.

The US core PCE inflation, which is the Fed's preferred inflation gauge, is estimated to have grown at a moderate pace of 0.2% on a monthly basis against the prior reading of 0.3%, with yearly figures rising steadily by 2.9%.

On Thursday, Fed dovish expectations eased after the revised US Q2 Gross Domestic Product (GDP) data showed that the economic growth was stronger than preliminary expectations. The data showed that the economy expanded by 3.8%, faster than flash estimates of 3.3%.

According to the CME FedWatch tool, the probability of the Fed cutting interest rates by 50 bps by the year-end eased to 62% from 73.3% seen on Wednesday.

Theoretically, easing Fed dovish expectations bode poorly for non-yielding assets, such as Gold.

Gold technical analysis

Gold price trades inside Thursday's trading range around $3,750 on Friday. The near-term trend of the Gold price remains bullish as the 20-day Exponential Moving Average (EMA) slopes higher around $3,644.80. An upward-sloping trendline from the August 22 low around $3,321.50 will act as key support for the Gold price.

The 14-day Relative Strength Index (RSI) oscillates inside the 60.00-80.00 range, suggesting a strong bullish momentum.

On the upside, the Gold price could extend its upside towards $3,900 if it breaks above the September 23 high of $3,791.

Gold daily chart