- Gold price drops more than 0.60% due to profit-taking and upbeat US economic data.
- US Gross Domestic Product for Q4 beat estimates, while unemployment claims fell.
- Durable Good Orders jumped while new orders shrank.
Gold price retreats after hitting a nine-month high of $1949.16 and dips beneath the $1940 mark, following the release of the Gross Domestic Product (GDP) preliminary reading in the United States (US), amongst other data. Therefore, the XAU/USD is trading at 1933.40, below the opening price by 0.49%.
Q4’s Gross Domestic Product in the United States exceeded estimates
US equity futures rose on the release of Q4’s GDP, while Gold extended its losses. The US economy grew at a solid 2.9% QoQ, above estimates of 2.6%, while for Q3, it rose 3.2%, in data revealed by the US Commerce Department. Meanwhile, for the entire year of 2022, the US economy expanded by 2.1%, less than the 5.9% registered in 2021. The report highlighted that consumer spending was the main driver of economic growth at the start of Q4. Spending remains underpinned by a robust labor market and excess savings.
US unemployment claims dived, while Durable Good Orders rose
At the same time, the US Department of Labor (DoL) reported that Initial Jobless Claims for the week ending on January 21 dropped 6K to a seasonally adjusted 186K, below the estimates of 205 K. In other data, Durable Good Orders rebounded from a -2.1% contraction in November to 5.6% in December, as data for the US Commerce Department showed. However, core New Orders contracted by -0.1% MoM, aligned with the consensus, as the US economy feels the pain of 425 basis points (bps) of tightening by the US Federal Reserve (Fed).
Gold traders brace for Fed’s inflation gauge on Friday
Friday, the US economic docket will feature the US Federal Reserve preferred gauge for inflation, the Core Personal Consumption Expenditures (PCE), with the monthly reading estimated at 0.3%, while annually based is foreseen at 4.4%. Headline PCE data is expected at 0.1% Mom and 5.5% YoY.
Gold Technical Analysis
The XAU/USD daily chart remains upward biased, although an ongoing correction might push prices towards the $1900 psychological level or to the January 18 daily low of $1896.74. Below that support, the 20-day Exponential Moving Average (EMA) rests at $1894.44, which, once cleared, could send XAU/USD diving toward the January 11 pivot low of $1867.22. As an alternate scenario, if XAU/USD reclaims $1950, a move toward the psychological $2000 level is on the cards.
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
AUD/USD turns south to test 0.6650 as US Dollar finds footing
AUD/USD is back in the red, testing 0.6650 in Friday's Asian trading. A renewed US Dollar uptick undermines the pair, even as risk sentiment remains in a sweeter spot. However, the downside appears limited amid the RBA's hawkish stance and hopes for more Chinese stimulus could act as a tailwind for the Aussie.
USD/JPY defends gains above 153.00 as Japan's intervention risks cap gains
USD/JPY defends minor bids above 153.00 early Friday, reversing a part of Thursday's corrective slide from its highest level since July 30. The upbeat market mood and the post-Fed US Dollar rebound support the pair but speculations over a likely Japanese intervention cap the pair's upside.
Gold price consolidates around $2,700 amid mixed cues
Gold price hovers around $2,700 in the Asian session on Friday, failing to extend the recovery from the vicinity of the 50-day SMA support, or over a three-week low. Resurgent demand for the US Dollar, despite improving risk tone, induces fresh weakness in Gold price.
Bitcoin, crypto market remain in uptrend following 25 bps Fed rate cut
The crypto market has remained in the green following the Federal Reserve's decision to lower interest rates. Historically, Bitcoin and the crypto market have reacted positively to low interest rate environments.
Outlook for the markets under Trump 2.0
On November 5, the United States held presidential elections. Republican and former president Donald Trump won the elections surprisingly clearly. The Electoral College, which in fact elects the president, will meet on December 17, while the inauguration is scheduled for January 20, 2025.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.