Price of Gold on the Rise amid US GDP Slowdown

FXOpen

Yesterday's data for last quarter showed that US GDP growth was estimated at 4.9% year-on-year, although GDP growth was expected to remain unchanged at 5.2%.

This disappointing performance could put pressure on the Fed to cut rates. After data is published:
→ the market has increased the likelihood of a rate cut by March to 83% from 79%, as evidenced by FedWatch;
→ the dollar index fell.

At the same time, the weakening dollar gave a bullish impetus to the price of gold, which exceeded the USD 2,050 level for the first time since December 4. By the way, returning to the analysis that we did on December 5, we note that the fan-shaped structure of trend lines remains relevant.

As predicted at the beginning of the month, the price broke below the USD 2,000 level and tested the lower line of the structure, followed by a price return above the psychological level.

As the graph shows:
→ before breaking through the resistance at USD 2,045, the price formed a bullish cup- and-handle pattern. Rising A-B lows may indicate increased buying pressure;
→ the price may continue to develop within the channel shown by the yellow lines.

Further developments will most likely be influenced by the publication of Core PCE Price Index data (today at 16:30 GMT+3). It is possible that the bulls will try to reach the upper yellow line.

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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

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