Gold Pressured After Strong US Economic Data

Gold prices remained under pressure on Thursday after fresh US economic data showed stronger-than-expected growth and persistent inflationary pressures. XAU/USD traded around US$4,025 per troy ounce, down about 1% on the day, as the latest data reinforced expectations that the Federal Reserve still has room to maintain a restrictive monetary policy stance.

The US economy expanded at an annualized rate of 3.4% in the third quarter, accelerating sharply from 2.2% in the previous quarter and exceeding market expectations of 3.2%. The stronger performance was supported by private investment, consumer spending, and government expenditures, indicating that the economy remains resilient despite elevated interest rates.

At the same time, Personal Consumption Expenditures (PCE) inflation accelerated again. Headline PCE rose 0.5% month-on-month in September and 3.6% from a year earlier, while Core PCE increased 0.3% on a monthly basis and 3.1% year-on-year. The figures show that inflation remains well above the Federal Reserve’s 2% target.

The combination of stronger-than-expected economic growth and persistent inflation is negative for gold, as it could keep expectations for another Fed rate hike in December alive. Higher rate expectations may support the US Dollar and Treasury yields while increasing pressure on non-yielding assets such as gold.

In the near term, the psychological US$4,000 level remains an important area to watch. As long as the Dollar and expectations for further Fed tightening remain firm, gold’s upside potential may stay limited, although geopolitical tensions and safe-haven demand could still provide support if prices hold above that level.(mrv)

Source : Newsmaker.id