Mixed United States statistics probe US Dollar bears, weigh on Gold price

Among the key data from the United States, better-than-expected fourth-quarter (Q4) Gross Domestic Product (GDP) and the Core Personal Consumption Expenditures (PCE) Price Index for December gained major attention. However, the actual releases were softer than their previous outcomes and hence signaled that the Federal Reserve’s (Fed) front-loading of interest rates has finally helped exert downside pressure on spending and inflation fears. That same built market forecasts that the Fed may rethink its aggressive rate and the policy pivot. It’s worth observing, however, that the figures like Durable Goods Orders for December and Weekly Initial Jobless Claims were joined by the last comments from the Fed policymakers resisting policy pivot to keep the hawks hopeful, which in turn weighed on the Gold price.

That said, the Federal Reserve's preferred gauge of inflation, namely the Core Personal Consumption Expenditures (PCE) Price Index, matched 4.4% YoY market forecast versus 4.7% prior while the monthly figure rose to 0.3% versus 0.2% expected and previous readings. Further, the US Bureau of Economic Analysis' (BEA) first estimate of the US fourth quarter (Q4) Gross Domestic Product marked an annualized growth rate of 2.9% versus 2.6% expected and 3.2% prior. On the same line, the Durable Goods Orders jumped 5.6% in December versus 2.5% market forecast and -1.7% upwardly revised prior. Furthermore, the growth of Personal Consumption Expenditures Prices weakened to 3.2% QoQ in Q4 compared to 4.3% marked forecast and prior readings. Further, Core Personal Consumption Expenditures eased to 3.9% QoQ for Q4 from 4.7% previous readings, versus 5.3% expected.

Even with the mixed US data, the US 10-year Treasury bond yields managed to snap a three-week south-run while posting 0.60% weekly gain to 3.50% by the end of Friday. Wall Street benchmarks, on the other hand, printed mixed weekly close.

Amid these plays, the US Dollar Index (DXY) managed to post the lowest weekly loss in three, down 0.07% to 101.92 at the latest, despite posting the third weekly downtrend and refreshing the eight-month low.

Given the inverse relationship between the Gold price and US Dollar, the XAU/USD bulls take a breather ahead of the key data/events.