- 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
GBP/USD hovers around 1.2750 on UK election day
GBP/USD is trading sideways near 1.2750 in the European session on Thursday. A broadly softer US Dollar keeps the pair afloat but traders refrain from placing fresh bets on the Pound Sterling, as UK voters head to polls.
EUR/USD steadies below 1.0800 ahead of ECB Accounts
EUR/USD keeps its range below 1.0800 in the European morning on Thursday. This upside is attributed to a decline in the US Dollar due to the escalated speculations of a September Fed rate cut. ECB Accounts is next in focus.
Gold trades with caution above $2,350, as focus shifts to US NFP
Gold price has reversed early gains to trade cautiously above $2,350 on Thursday. Sustained US Dollar weakness alongside sluggish US Treasury bond yields keeps the downside in Gold price capped amid the July 4 US holiday-thinned market conditions. Friday's NFP data eyed.
Binance coin poised for an 11% crash
Binance Coin breached its ascending trendline support on Wednesday and declines 3% on Thursday. On-chain analysis reveals a long-to-short ratio below one, indicating bearish sentiment and suggesting a potential price downturn for BNB in the days ahead.
Global strategy 3Q 2024
The latest economic and inflation data support a normalisation of monetary policy. The ECB started by cutting interest rates for the first time in June, while the US Fed is still waiting.