Gold Price Analysis: Gold Inches Up as Traders Eye US Economic Data

April 25, 2023

New Delhi, India

Gold prices witnessed a modest uptick amidst a weaker US dollar and a subdued risk sentiment. However, gains were limited as traders awaited key US macroeconomic data, particularly the Advance Q1 GDP report, to gauge the Federal Reserve’s future policy decisions.

Market Dynamics:

• Gold price (XAU/USD) attracted some buying interest near the $2,300 level, breaking a three-day losing streak.
• The US dollar faced selling pressure, hovering near its lowest level in over a week, lending support to the safe-haven appeal of gold.
• Despite a slight deterioration in global risk sentiment, traders remained cautious, awaiting clearer signals from the Fed regarding its rate-cutting path.

Focus on US Macroeconomic Data:

• Investors awaited the release of the Advance Q1 GDP report, expecting a 2.5% annualized growth rate compared to the previous quarter’s 3.4%.
• The core Personal Consumption Expenditures (PCE) Price Index, due on Friday, would influence market expectations about future Fed policy decisions, impacting USD demand and gold price.

Market Outlook:

• Traders anticipated strong follow-through buying before confirming the end of the corrective slide from the all-time peak, indicating a cautious approach to positioning for further gains.
• The subdued range-bound price action in gold reflected market uncertainty ahead of key US economic data releases.

Conclusion: Gold prices edged higher amid a weaker US dollar and softer risk tone, supported by cautious investor sentiment ahead of crucial US macroeconomic data. With the focus on the Advance Q1 GDP report and the PCE Price Index, traders awaited clearer signals about the Fed’s policy stance, which would likely influence gold prices in the near term.