GOLD Rebounds as US Growth Slows: Detailed Analysis
Gold experienced a notable rebound on Thursday after the second estimate of US first-quarter GDP growth revealed a downward revision to an annualized 1.3% from the initial estimate of 1.6%. This revision reflects weaker consumer spending, which has important implications for inflation and monetary policy.
The slower GDP growth is attributed to a decline in consumer spending, a critical component of economic activity. This deceleration is expected to help contain inflationary pressures, thereby influencing the Federal Reserve's (Fed) policy trajectory. As a result of these developments, market participants now anticipate a more dovish stance from the Fed, potentially leading to lower interest rates in the near future.
The impact of the revised GDP figures was immediately felt in the bond markets. The yield on the US 10-year Treasury note, which had reached a four-week peak of 4.63%, retreated to 4.55%. This decline in yields made the US Dollar less attractive, providing support for gold prices.
From a technical perspective, our analysis aligns with previous forecasts that anticipated a bullish impulse for gold. The price action is currently finding significant liquidity from key demand areas, suggesting that the market is preparing for a further upward movement. Our initial target remains at $2,400, based on the technical signals and market conditions.
The footprint analysis reinforces this outlook. It shows that gold prices are drawing liquidity from the demand zones established in the previous trading sessions. This accumulation of liquidity is a positive sign, indicating that buyers are stepping in at these levels, thus supporting a higher price trajectory.
In summary, the combination of weaker-than-expected US GDP growth, reduced consumer spending, and declining Treasury yields has created a favorable environment for gold. The technical indicators also support a bullish outlook, with the price action confirming our expectations of a continued upward trend. Investors should monitor upcoming economic data and Fed communications for further insights into the potential direction of gold prices.
Gold Futures H4 Footprint
Gold Futures Daily Footprint Chart
The slower GDP growth is attributed to a decline in consumer spending, a critical component of economic activity. This deceleration is expected to help contain inflationary pressures, thereby influencing the Federal Reserve's (Fed) policy trajectory. As a result of these developments, market participants now anticipate a more dovish stance from the Fed, potentially leading to lower interest rates in the near future.
The impact of the revised GDP figures was immediately felt in the bond markets. The yield on the US 10-year Treasury note, which had reached a four-week peak of 4.63%, retreated to 4.55%. This decline in yields made the US Dollar less attractive, providing support for gold prices.
From a technical perspective, our analysis aligns with previous forecasts that anticipated a bullish impulse for gold. The price action is currently finding significant liquidity from key demand areas, suggesting that the market is preparing for a further upward movement. Our initial target remains at $2,400, based on the technical signals and market conditions.
The footprint analysis reinforces this outlook. It shows that gold prices are drawing liquidity from the demand zones established in the previous trading sessions. This accumulation of liquidity is a positive sign, indicating that buyers are stepping in at these levels, thus supporting a higher price trajectory.
In summary, the combination of weaker-than-expected US GDP growth, reduced consumer spending, and declining Treasury yields has created a favorable environment for gold. The technical indicators also support a bullish outlook, with the price action confirming our expectations of a continued upward trend. Investors should monitor upcoming economic data and Fed communications for further insights into the potential direction of gold prices.
Gold Futures H4 Footprint
Gold Futures Daily Footprint Chart
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