Gold Prices Stuck in a Narrow Range Ahead of Key U.S. Economic Data
Zatrun Published at April 26, 2023

On Wednesday, gold prices stayed in a narrow range as traders awaited US economic data to gauge the Federal Reserve’s stance on monetary policy. Despite a little change in spot gold prices at $1,998.90 per ounce by 10:14 GMT, U.S. gold futures rose 0.3% to $2,009.50. If the news caught your attention, continue reading the content below.

Gold Prices

US GDP Data in Focus

The market is focused on the release of the US quarterly gross domestic product data due on Thursday, followed by the reading on the core PCE index on Friday. Traders are eyeing the Federal Reserve’s May 2-3 policy meeting and expecting signals on the Fed’s stance on monetary policy. Michael Hewson, Chief Market Analyst at CMC Markets, said that all eyes would be on the tone that the Fed strikes in the upcoming meeting.

Impact of Fed’s Decision on Gold Prices

If the Fed signals a pause in its decision next week, further weakness in yields should be positive for gold, as long as $1,960 holds on the downside. However, much will depend on whether the Fed signals a pause when it makes its decision next week. Gold is considered an inflation hedge and safe investment amid economic uncertainties. But, rising rates reduce the non-yielding bullion’s attractiveness. Traders are mostly expecting the US central bank to raise rates by 25 basis points in the upcoming meeting.

US consumer confidence dropped to a nine-month low in April due to mounting worries about the future. Matt Simpson, a senior market analyst at City Index, suggests that recessionary fears are providing a floor for gold prices.

Here are some additional factors that could affect gold prices in the coming days:

  • The outcome of the Fed’s policy meeting on May 2-3.
  • The release of U.S. economic data, including GDP and inflation data.
  • The direction of the U.S. dollar.
  • Geopolitical developments.

Investors should monitor these factors closely as they could have a significant impact on gold prices.

Silver Prices Dip

Meanwhile, spot silver prices fell by 0.2% to $25.00 per ounce. However, a correction in the dollar and a spike in gold prices could attract more safe-haven buying in silver. Hareesh V, Commodity Research Head at Geojit Financial Services, said that there are hopes that industrial demand will grow on hopes of China’s growth outlook.

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