Gold prices remain above $2,300 as the US dollar weakens in anticipation of preliminary US Q1 GDP data.
There is speculation that the Fed may continue to advocate for prolonged high interest rates despite possible slower GDP growth.
Additionally, the recent easing of tensions in the Middle East has strengthened the appeal of risky investments
Gold (XAU/USD) remained above the key support level of $2,300 during Thursday’s European session. The precious metal is seeing some buying interest as the U.S. dollar continues to decline on concerns about a possible interest rate hike by the Federal Reserve (Fed). These concerns were heightened by the latest S&P Global Preliminary PMI report in April, which indicated a slowdown in economic activity.
The short-term outlook for gold looks dim as Federal Reserve officials see no immediate need to cut interest rates amid rising inflation and strong labor market conditions. Additionally, demand for safe-haven assets has eased as concerns about rising tensions in the Middle East have eased.
Upcoming US macroeconomic data, including Q1 Gross Domestic Product (GDP) and key Personal Consumption Expenditure Index (PCE) data for March, will influence the trajectory of gold prices. Any significant change in these economic indicators could prompt traders to reassess their expectations regarding the timing of a potential Fed rate cut. Currently, financial markets are anticipating the possibility of the first rate cut in September.
Gold rose above $2,320 as the US dollar continued to correct. A weak preliminary PMI number in April created selling pressure on the US dollar, raising concerns about the country’s economic outlook. The survey indicated a decline in new business flows in April for the first time in six months.
Investors are eagerly awaiting the release of US Q1 GDP data, which serves as an important gauge of the country’s economic health. Analysts forecast a modest 2.5% expansion, marking a slowdown from 3.4% growth in the final quarter of 2023. With growth expected to slow, the US economy is poised to outperform its Group of Seven (G7) counterparts. ) caste.
This week is packed with notable events, starting with the release of Q1 GDP data and core PCE inflation data, the Federal Reserve’s preferred inflation gauge, scheduled for Friday. Analysts expect a steady 0.3% month-on-month rise in core PCE inflation for March, with the annual figure expected to ease to 2.6% from February’s 2.8%.
This week is packed with notable events, starting with the release of Q1 GDP data and core PCE inflation data, the Federal Reserve’s preferred inflation gauge, scheduled for Friday. Analysts expect a steady 0.3% month-on-month rise in core PCE inflation for March, with the annual figure expected to ease to 2.6% from February’s 2.8%.
This week is packed with notable events, starting with the release of Q1 GDP data and core PCE inflation data, the Federal Reserve’s preferred inflation gauge, scheduled for Friday. Analysts expect a steady 0.3% month-on-month rise in core PCE inflation for March, with the annual figure expected to ease to 2.6% from February’s 2.8%
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This week is packed with notable events, starting with the release of Q1 GDP data and core PCE inflation data, the Federal Reserve’s preferred inflation gauge, scheduled for Friday. Analysts expect a steady 0.3% month-on-month rise in core PCE inflation for March, with the annual figure expected to ease to 2.6% from February’s 2.8%.
The Fed’s interest rate outlook will be heavily influenced by underlying inflation data leading up to its next meeting on May 1. Market expectations say the Fed is likely to keep interest rates at a range of 5.25% to 5.50% at the May policy meeting.
