In the mid-North American session, the price of gold surged by more than 1%, buoyed by robust economic indicators from the United States (US). A particularly strong showing in consumer spending, surpassing market expectations, hinted at a resilient economy and potentially deterred the US Federal Reserve (Fed) from considering interest rate cuts. This prospect served as a favorable factor for the precious metal.
Despite the positive economic data, gold maintained its upward momentum, with physical demand and prevailing risk aversion providing support and likely keeping prices around current levels.
XAU/USD reached $2,384 after briefly dipping to a daily low of $2,324. Investor concerns escalated following Iran’s recent missile and drone attack over the weekend, prompting apprehension about potential Israeli retaliation. Although the White House urged Israel to refrain from retaliatory actions, Israel’s military chief’s statement hinted at a forthcoming response to the Iranian aggression.
The heightened geopolitical tensions underscored the appeal of safe-haven assets such as gold and the US Dollar, with the possibility of these assets moving in tandem amid uncertain global conditions.
In other economic news, US Retail Sales for March exceeded expectations, with particular attention drawn to the substantial surge in sales within the control group—a crucial metric used in Gross Domestic Product (GDP) calculations. This robust performance suggests strong growth prospects for the first quarter of 2024.
Following the release of this data, estimates for Q1 2024 Gross Domestic Product (GDP) indicate an expected growth rate of 2.8% according to the Atlanta GDPNow model, an increase from the 2.4% estimate reported on April 10. This upward revision reflects growing confidence in the resilience and momentum of the US economy amidst positive economic indicators and geopolitical uncertainties.
