Gold Price Prediction: XAU/USD falls to $1960 as USD recovers in advance of Core PCE Price Index

After failing to hold above $1,970.00 during the Asian session, the gold price (XAU/USD) has declined. As concerns of a U.S. banking crisis have diminished significantly, the allure of the precious metal has decreased. As the US Dollar Index (DXY) has shown a recovery move, it is expected that the Gold price will continue to correct.

The USD Index has recovered after establishing a cushion around 102.40. The USD Index has extended its recovery to near 102.60 as investors transfer their attention to Friday's core Personal Consumption Expenditures (PCE) Price Index data.

The Federal Reserve's (Fed) preferred inflation gauge is anticipated to increase by 0.4%, which is less than the previous increase of 0.6%. The annual rate is anticipated to remain unchanged at 4.7%. A deceleration in the rate of consumer spending on essential products will further diminish the likelihood of another rate rise by the Federal Reserve. The likelihood of a decline in consumer expenditure has increased as the labor cost index has remained lower than anticipated. In addition, after the failure of three mid-sized institutions, US banks have tightened credit conditions for individuals and businesses.

In the meantime, S&P500 futures posted stronger gains during the Asian session following a rangebound auction on Tuesday. US stocks have been supported by expectations that the Federal Reserve (Fed) will maintain constant interest rates in the future.