The gold price (XAU/USD) remained above the vital benchmark of $2,300 as the US dollar weakened after the release of local gross domestic product (GDP) data on Thursday, 25 April 2024.
Gold Price Holds Steady While US GDP Shakes Up Dollar
The US Bureau of Economic Analysis (BEA) said that during Q1 2024, US GDP grew by 1.6% according to the ‘advance’ estimate. The BEA stated:
In the fourth quarter of 2023, real GDP increased 3.4 percent. The increase in the first quarter primarily reflected increases in consumer spending and housing investment that were partly offset by a decrease in inventory investment. Imports, which are a subtraction in the calculation of GDP, increased.
At the time of reporting, the USD was down 0.24%, with the US Dollar Index (DXY) at just over 105.6. The sluggish growth of the Q1 GDP has investors concerned about the US economy. Compared with the 3.4% GDP growth in the last quarter of 2023, the Q1 growth of just 1.6% indicates significant deceleration. It is also almost 1% lower than the expected 2.5% margin.
Don’t miss out the latest news, subscribe to LeapRate’s newsletter
According to analysts, this data shows that the US economy is struggling to shoulder the higher interest rates imposed by the US Federal Reserve. This may cool the interest of investors, and their eyes will now turn to the latest personal consumption expenditure (PCE) price index, which will determine the behaviour of the gold price.
These indicators also influence the US Federal Reserve’s decisions about possible rate cuts. The USD is clinging to some gains in the hope that the current rates remain unchanged.
