The USD used to be really bullish in the last 2-3 months as the FED started giving signals of slowing down with rate hikes which they have done with a 50 basis points (bps) hike in this month’s meeting, after several 75 bps hikes. That has been keeping the sentiment bearish for the USD since October, while risk assets have turned bullish as risk sentiment has improved on slowing central banks.

The global and the US economy have slowed considerably in Q4 and economists are expecting a recession next year. Although Q3 numbers are still holding up and today’s final GDP revision for Q3 in the US was revised higher, which has improved the sentiment for the USD and turned risk sentiment negative.

GOLD is trading at around $1,800, after making a swift reversal from $1,820 where it was trading before the US GDP report. We were thinking about buying Gold at $1,800 after the recent surge, but we might wait for the price to reach the 100 SMA (green) lower, which has acted as support before on the H4 chart, as shown in the image above.

US Final Q3 GDP Report

• Q3 final GDP +3.2% vs +2.9% expected
• The second GDP estimate was +2.9%
• The advance GDP estimate was +2.6%
• Q2 GDP was -0.6%

Details:

• Consumer spending +2.3% vs +1.7% second reading
• GDP deflator 4.4% vs 4.3% second reading
• Core PCE prices 4.7% vs 4.6% second reading
• Corporate profits +0.8% vs -0.2% second reading
• Sales +4.5% vs 4.0% second reading
• Inventories cut 1.19 percentage points from GDP
• Exports +14.6% vs +15.3% second reading (imports unrevised)

The US dollar has jumped higher on this report, which is a rare market event for the third and last reading on the GDP. The idea is that higher GDP figures raise the odds that the Fed will follow through on rate hikes and raise the terminal top rate. The Q3 core price PCE numbers which are the FED’s favoured measure of inflation were also higher, together with consumer spending, which is positive.

Gold XAU Live Chart