Gold prices experienced a modest rise during the North American session following the release of mixed US economic data. While weaker-than-expected GDP figures fueled hopes of potential Fed rate cuts, a sharp increase in inflation tempered optimism and kept a lid on Gold’s gains.
Key Factors:
- Conflicting Signals: Q1 US GDP disappoints, suggesting a slowdown that could support a less hawkish Fed stance. However, the surge in inflation reinforces the Fed’s justification for maintaining higher interest rates.
- Shifting Fed Expectations: Recent Fed commentary signals their determination to combat inflation, highlighting the ongoing tug-of-war between growth and inflation concerns for the Gold market.
Technical Analysis: $2,330 Remains Key
- Immediate Resistance: Gold faces resistance around the April 24 high ($2,337) and a sustained break above this level could open the door towards the psychological $2,350 and $2,400 levels.
- Potential Downside: A pullback below the April 15 daily low ($2,324) could pave the way to test the $2,300 mark followed by subsequent support levels at April 23 low ($2,229) and the March 21 high ($2,222).
Outlook:
Gold’s trajectory remains closely tied to evolving Fed expectations. Investors will scrutinize further economic data and Fed communication for clues on the pace and timing of any potential rate cuts.
