- Real GDP in the U.S. expands by 3.2% in the first quarter.
- US Dollar Index fails to capitalize on the upbeat growth reading.
- Gold remains on track to post weekly gains.
Following a consolidation phase a little above the $1280 mark, the XAU/USD pair gained traction and rose to its highest level in 10 days at $1285. As of writing, the pair was adding more than $6 on a daily basis at $1284.50.
The broad-based USD weakness in the second half of the day seems to be helping the pair push higher. In its first estimate today, the U.S. Bureau of Economic Analysis said that the real GDP in the first quarter expanded by 3.2% following the previous quarter’s 2.2% and surpassed the market expectation of 2.1%. However, the press release also showed that the PCE price index increased by 0.6% after rising 1.5% in Q4 of 2018 to reveal a slowdown in inflation and didn’t allow the greenback to capitalize on the upbeat GDP figure.
Furthermore, assessing the data, “When inventories are replenished in one quarter, they tend to be depleted in the following one. Inventories contributed 0.65% to growth, and subtracting this figure makes the headline less attractive,” FXStreet analyst Yohay Elam pointed out.
Meanwhile, the 10-year T-bond yield extended its slide and is now down more than 1% on the day, hinting at a sour market sentiment, which helps the precious metal find demand as a safe-haven.
Technical levels to consider