Gold Consolidates Just Below 2,340 Ahead of the Critical US PCE Report The gold (XAU) price gained 0.69% on Thursday as the [US Dollar Index](/indices/usdollar) (DXY) dropped following the release of a weaker-than-expected US Gross Domestic Product (GDP) report.Although the US GDP report revealed smaller-than-expected growth in output in Q1, it also indicated persistent inflation.Consequently, the probability of an interest rate cut by the Federal Reserve (Fed) this summer has decreased.Still, the DXY declined, while gold, which is considered a protection against inflation, rose.Meanwhile, data from the Hong Kong Census and Statistics Department showed that China’s net gold imports via Hong Kong jumped by 40% in March compared to the previous month.
According to Reuters, China is the biggest bullion consumer, and its buying trends can impact gold prices.The central bank of China added 160,000 troy ounces of gold to its reserves in March.Overall, the People’s Bank of China (PBOC) was the largest official buyer of gold in 2023.
Thus, even as US interest rates are expected to remain elevated for an extended period, the price of gold is supported by fears of inflation and strong demand in the physical market.[XAU/USD](/currencies/xau-usd) rose slightly during the Asian and early European trading sessions.Today, the main focus is on the US inflation data.The Bureau of Economic Analysis will publish its Personal Consumption Expenditure (PCE) Price Index at 12:30 p.m.UTC.It’s the Fed’s preferred measure of inflation, so the market will pay close attention to the data.”After a very dramatic move higher in gold over the course of the last several weeks, it is in the midst of a consolidation.Certainly, that could change in the short term if we see an inflationary print that comes out very benign and inflation is much more reduced,” said David Meger, the director of metals trading at High Ridge Futures.
Indeed, if core PCE figures are lower than expected, XAU/USD may potentially rise above 2,350.Conversely, higher-than-expected bumpers may trigger a correction in gold, possibly towards 2,290.
“Spot gold is biased to break resistance at $2,351 per ounce and rise into the $2,364–$2,377 range,” said Reuters analyst Wang Tao.Euro Rises Despite Decreasing Chances of Rate Cuts by the Fed The [euro](/currencies/eur-usd) (EUR) gained 0.30% on Thursday as the US dollar index (DXY) declined after US Gross Domestic Product (GDP) figures came out lower than expected.The headline US GDP figures were rather disappointing and showed that the US economy in Q1 grew at its slowest pace in nearly two years.
However, a surge in imports and a small build-up of unsold goods at businesses indicated that consumer demand remains strong.This data and an acceleration in inflation reinforced expectations that the Federal Reserve (Fed) would not cut interest rates before September.The immediate market reaction was to sell the [US dollar](/currencies/us-dollar-index) and buy the euro despite the divergence in interest rate expectations between the two economies continuing to favor the greenback.Currently, the market is pricing in just 35 basis points (bps) worth of rate cuts by the Fed but expects around 60 bps worth of rate reductions by the European Central Bank (ECB) in 2024.
Furthermore, ECB officials continue to give dovish signals.Fabio Panetta, the ECB policymaker, called on Thursday for timely and small interest rate cuts to decrease the risk of prolonged economic stagnation in the euro area.Overall, the fundamental pressure on EUR/USD remains bearish.EUR/USD was essentially unchanged during the Asian and early European trading sessions.Today, the main event is the US Personal Consumption Expenditure (PCE) Price Index at 12:30 p.m.
UTC.The market will pay attention to the data as it is considered to be the Fed’s preferred measure of the inflation pace.
If the figures are higher than expected, the short-term bullish trend in EUR/USD will almost certainly reverse, and the pair may drop below 1.06900.However, if the PCE numbers are lower than expected, EUR/USD may potentially rise above 1.07500.BTC/USD Slips as Streak of Inflows in BlackRock ETF Ends The price of [Bitcoin](/crypto/bitcoin) (BTC) failed to break above the 65,500 resistance.
Now, BTC is moving lower, with a risk of dropping below 63,000.
Despite high expectations for the Bitcoin halving—an event that cuts the mining reward in half and is expected to decrease the supply of new coins—the actual effect on the market has been relatively subdued.According to a Bloomberg report utilising CryptoQuant data, the funding rate for Bitcoin’s perpetual futures—the cost to maintain long positions—has dipped into the negative for the first time since October 2023.This means that there are now more short positions in perpetual futures than long ones.In a Bloomberg report, K33 Research analyst Vetle Lunde wrote that the ‘current streak of neutral-to-below-neutral funding rates is unusual,’ indicating that the market might be heading into a price-consolidation phase.The decrease in Bitcoin’s funding rate is linked to a drop in net inflows into the US spot Bitcoin exchange-traded funds (ETFs), which had previously driven the cryptocurrency to its highs.With the end of BlackRock’s (NYSE: [BLK](/equities/blackrock,-inc.-c)) 71-day streak of ETF inflows, Bitcoin traders faced uncertainties.
BlackRock’s [IBIT](/etfs/ibit-nasdaq), a spot bitcoin ETF on [Nasdaq](/indices/nq-100), has dropped for the first time since its establishment, marking a significant shift in investors’ sentiment.This could indicate a decreasing interest in BTC funds, as observed by Farside Investors.Since its launch, BlackRock’s IBIT has gained over $15 billion in assets.Together, 11 funds have attracted more than $12 billion in net inflows.However, despite the initial heavy investment, investors’ enthusiasm has weakened recently.Thus, the bullish momentum in Bitcoin slowed.[BTC/USD](/crypto/bitcoin/btc-usd) was flat during the Asian and early European trading sessions.
Today, the US Personal Consumption Expenditure (PCE) Price Index report at 12:30 p.m.UTC may trigger some volatility in BTC/USD.If the pair finishes the day below the important 63,000 support level, it could trigger a further decline..
