Gold price Range Trades ahead of the first estimate for US Q4 GDP data.
The gold price (XAUUSD) is in the woods as Investors await the announcement of the US Gross Domestic Product (GDP) for Q4. Which will Provide new data on which to make an interest rate Forecast. Investors are keeping an eye on whether Positive GDP data will Undercut the Prevailing argument for the Federal Reserve (Fed) to lower interest rates early.
S&P Global provided stronger US PMI data, which Reflects Resilience in the US economy. And allows Fed policymakers to to characterize rate cuts beginning in March as “premature”. The US economy is sturdy, thanks to strong labor market conditions and healthy consumer spending. Furthermore, widely anticipated interest rate reduction by the Fed this year have given the economic outlook a boost.
Aside from the Q4 GDP data, market participants will pay close attention. To the core Personal Consumption Expenditure price index (PCE) data for December, which will be released on Friday. Fed policymakers prefer underlying core inflation when setting interest rates.
Daily Digest Market Movers: Gold prices fluctuate flat ahead of US data.
Gold price moves sideways to about $2,015 after a significant dip, ahead of the United States Q4 GDP report, which will be released at 13:30 GMT.
Investors expect the US economy will develop at a slower pace of 2.0%, compared to the robust growth of 4.9% achieved in the third quarter of 2023.
Furthermore Moderate economic growth would alleviate the difficult inflation outlook and deter Federal Reserve policymakers from proposing a restrictive interest rate policy.
According to the CME Fedwatch tool, the probability of an interest rate lowering of 25 basis points (bps) in March have plummeted to 42.4%.
The strong recovery in US PMIs in December lowered bets on interest rate declines. The Manufacturing PMI rose above the 50.0 mark to 50.3, above expectations and the previous figure of 47.9.
Moreover The Services PMI represents the service sector, which accounts for two-thirds of the. The economy increased to 52.9 from the previous figure of 51.4 and expectations of 51.0.
Furthermore A rapid rise in US economic activity suggests that the economy has begun 2024 on a solid foundation and has boosted the prognosis for the full year.
Business confidence was boosted by expectations of lower inflation. Cost of living concerns, and lower borrowing rates.
A solid set of PMI figures allowed the US dollar to recover sharply. If the US GDP data is greater than expected. The appeal of the US Dollar may increase even more.
The US Dollar Index (DXY) has progressively corrected to about 103.20. And is projected to remain sluggish in the foreseeable future.
Q4 GDP statistics, market players will move their emphasis to the core underlying inflation data.
Following the US Q4 GDP statistics, market players will move their emphasis to the core underlying inflation data. December, which will be launched on Friday.
Moreover A persistent core PCE price index report would bolster. The case for a tight monetary policy stance.
Next week, the Fed is widely expected to preserve the status quo. But a tenacious inflation report would allow them to support higher interest rates at least until the first half of 2024.
