- Gold price attracts some buyers to $2,055 amid the weaker US Dollar.
- US Q3 GDP came in weaker than expected, expanding at 4.9%.
- The markets are pricing in around 79% odds of a rate cut in March.
- Gold traders await the US Core Personal Consumption Expenditure Price Index (Core PCE), due on Friday.
Gold price (XAU/USD) extends its gains during the early Asian session on Friday. The softer US Dollar (USD) and the downbeat US GDP growth number lends some support to the yellow metal. Gold price currently trades near $2,055, gaining 0.53% on the day.
Meanwhile, the US Dollar Index (DXY), a measure of the value of the USD against a weighted basket of currencies used by US trade partners, has dropped to its lowest level since August, near 101.80. The Treasury yields rose modestly, with the 10-year yield standing at 3.89%.
Data released on Thursdays showed that the US Gross Domestic Product (GDP) for the third quarter came in weaker than expected, expanding at 4.9%, according to the US Bureau of Economic Analysis (BEA) report. Furthermore, Initial claims for unemployment benefits increased by 2,000 to a seasonally adjusted 205,000 for the week ending December 16, worse than the market expectation of 215,000.
Softening US economic data and moderating inflation indicated that the Federal Reserve (Fed) monetary policies are restrictive enough to bring inflation sustainably back to target. Fed committee members expected at least three rate cuts in 2024, and the markets are pricing in around 79% possibility of a rate cut in March, according to the CME FedWatch tool. That being said, the lower US might boost the appeal of gold.
Looking ahead, gold traders will closely monitor November’s US Core Personal Consumption Expenditure Price Index (Core PCE) on Friday. The Fed’s preferred inflation gauge is estimated to show an increase of 0.2% MoM and 3.3% YoY. Furthermore, the University of Michigan Consumer Confidence Survey, Durable Goods Orders report, and New Home Sales data will also be released from the US docket.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds steady near 1.0800 ahead of key events
EUR/USD stays in a consolidation phase at around 1.0800 early Tuesday after closing in positive territory on Monday. Market participants await ZEW sentiment data from Germany and the EU, producer inflation data from the US and Fed Chairman Powell's speech.
GBP/USD trades at around 1.2550 after UK jobs data
GBP/USD struggles to build on Monday's gains and hovers around 1.2550 in the European session on Tuesday. The data from the UK showed that the Unemployment Rate edged higher to 4.3% in the three months to March as forecast, failing to trigger a reaction.
Gold price gains ground ahead of US PPI data, Fed’s Powell speech
Gold price rebounds despite the consolidation of the US Dollar on Tuesday. The upside of yellow metal might be limited as traders might wait on the sidelines ahead of key US inflation data this week.
Top meme coins post gains following increased social activity amid GameStop pump
Meme coins in the crypto market saw impressive gains on Monday following a recent surge in GameStop stock. The increased attention surrounding these tokens signifies a potential resumption of the meme coin frenzy of March.
Entering a crucial run of data for financial markets
We are entering a crucial period for financial markets and forecasters as Americans' near-term inflation expectations rise again. Upcoming reports on the CPI and PPI for April, along with new data on retail sales and industrial production, will provide valuable insights.