Following a consolidation phase at around $1,950 in the second half of the week, XAU/USD faced renewed bearish pressure on Friday and ended up nearly 2% down on a weekly basis. Bulls are set to remain on sidelines ahead of key US data, FXStreet’s Eren Sengezer reports.
“Markets expect the US economy to expand at an annualized rate of 1% in Q1 following the 6.9% growth recorded in the fourth quarter of 2021. In case the GDP reading surpasses analysts’ forecast, this would confirm the Fed’s view that the economy will be able to handle aggressive tightening. On the other hand, a disappointing GDP print could cause the dollar to lose interest and open the door for an XAU/USD recovery.”
“On Friday, April inflation data from the eurozone will be watched closely by market participants. A hotter-than-expected inflation reading could fuel a rally in EUR/USD. In such a scenario, the selling pressure surrounding the dollar should help gold edge higher.”
“The US Bureau of Economic Analysis will release the Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred gauge of inflation, on Friday. Core PCE Price Index is forecast to edge lower to 5.3% on a yearly basis in March from 5.4% in February. A soft PCE inflation figure should weigh on the dollar, supporting gold, and vice versa for a stronger result.”
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