Gold prices found renewed demand early Thursday, holding firm above the $2,750 mark. Despite its stability, gold remains in a familiar range, just below the record high of $2,790. Market participants keenly await the release of the US fourth-quarter advance Gross Domestic Product (GDP) report, hoping it will provide fresh impetus to the precious metal's trajectory.
The anticipation surrounding the GDP data comes in the wake of faltering US economic growth prospects. Under President Donald Trump's administration, risks associated with trade wars are on the horizon, further impacting market sentiment. In this climate of uncertainty, the US Dollar has remained broadly subdued following the Federal Reserve's recent decision.
Supporting gold's current status are strong Australian export prices, which have provided a solid foundation for the metal's performance. Additionally, market observers are paying close attention to the weekly US Jobless Claims and the quarterly Personal Consumption Expenditures (PCE) Prices data, as these will further elucidate economic conditions.
The technical setup for gold continues to favor buyers, with record highs still within sight. Fed Chairman Jerome Powell has indicated that while the Federal Reserve seeks further progress in controlling inflation, there is no urgency to adjust current policy. This measured approach is reflected in the market's expectations, with traders pricing in around 46 basis points (bps) of cuts by year-end—slightly down from 48 bps prior to the Fed's statement.
Late Wednesday saw gold prices stage a modest rebound as the US Dollar failed to maintain gains inspired by the Fed's stance. The widening US trade deficit in goods suggests that upcoming GDP data could fall short of market forecasts, adding another layer of complexity to the economic landscape.
Technical indicators continue to bolster confidence among gold buyers. The 14-day Relative Strength Index (RSI) is comfortably positioned above the midline at approximately 63, sustaining buyer optimism. Moreover, a Bull Cross was confirmed last Thursday when the 50-day Simple Moving Average (SMA) closed above the 100-day SMA, further supporting bullish sentiment.