GOLD PRICE FORECAST: XAU/USD SKIDS BELOW $1,980 AS UPBEAT US PMI FIGURES STRENGTHEN HAWKISH FED BETS

Gold price has shifted its business below $1,980.00 after solid preliminary US PMI data.

Solid PMI numbers could force the Fed to continue to hike rates further.

Fed Kashkari cited recent stress in the banking sector could bring the US closer to recession.

Gold price (XAU/USD) has shifted its auction below $1,980.00 in the early Asian session. The precious metal is not showing any signs of a rebound, therefore, more downside is anticipated further. Bearish bets for Gold price soared after S&P Global reported upbeat preliminary United States PMI figures (March) on Friday. Manufacturing PMI jumped to 49.3 vs. the consensus of 47.0 and the former release of 47.3. While Services PMI accelerated to 53.8 against the estimates of 50.5 and the prior release of 50.6.

A vertical jump in the overall economic activities indicates that overall demand is robust and the road ahead for pushing US inflation lower would be full of challenges for the Federal Reserve (Fed). Last week, Fed chair Jerome Powell hinted that few rates are in pipeline now to avoid a banking crisis. And now solid PMI numbers could force the Fed to continue to hike rates further.

Meanwhile, Minneapolis Fed president Neel Kashkari cited on Sunday, “Recent stress in the banking sector and the possibility of a follow-on credit crunch brings the US closer to recession. It definitely brings us closer." It would be a tough call from the Fed to bring more interest rates if recession fears are potential.

Meanwhile, the US Dollar Index (DXY) is juggling in a narrow range below 103.20 after a solid recovery. The USD Index is looking to add gains further despite potential fears of further banking turmoil. S&P500 futures settled on a positive note last week despite sheer volatility inspired by the Fed policy. The impact of dovish interest rate guidance by the Fed was witnessed in US Treasury yields. The 10-year US Treasury yields dropped to 3.37%.