27/09/2024
📊 Gold slows down as traders closely monitor the U.S. reports
Gold (XAU) showed the first signs of slowing down on Thursday, as the recent U.S. reports were better than expected.
The U.S. Gross Domestic Product (GDP) growth report showed a growth of 3% annually for Q2. Jobless claims unexpectedly decreased, and durable goods orders were higher than expected. Although this data is supposed to question the possibility of future aggressive rate cuts, the market still awaits another 50-basis-point (bps) reduction in November by the Federal Reserve (Fed). According to the CME FedWatch tool, there is now a 50.2% probability of a large rate decrease.
Another positive factor for gold is that China's central bank unveiled its biggest stimulus this week since the COVID-19 pandemic and is expected to cut its seven-day reverse repo rate. ‘This stimulus is giving industrial metals a boost, and gold won't be an exception’, said Wang Tao, Reuters analyst. Also, the tensions in the Middle East persist, and they usually act in favour of the precious metal.
Gold has been correcting downwards during Asian and early European trading hours. According to Wang Tao: ‘Spot gold may retest support at $2,654 per ounce. A break below could open the way towards the $2,633 to $2,641 range’. Market participants will be waiting for the U.S. Personal Consumption Expenditures (PCE) Price Index report, coming out today at 12:30 p.m. UTC. Stronger-than-expected data may further diminish expectations for a large rate cut by the Fed, pushing XAUUSD lower. Otherwise, gold will likely continue rising.
