Gold Price Maintains Bullish Trend Above $2,000 Amid Downbeat Market Sentiment – Awaiting US Inflation Data and Fed Meeting Minutes

The US economy has recently sent mixed signals, causing investor concern. As a result, the demand for safe-haven assets like gold has increased. Gold prices initially fell after the release of US nonfarm payroll statistics, which revealed a strong labor market in March. Consequently, the Federal Reserve adopted a more hawkish stance, impacting gold prices.

However, investors’ attention now focuses on upcoming inflation data and the Federal Reserve’s meeting minutes, which may affect gold prices. If the data shows significant inflation and the Fed plans to lower interest rates, gold prices may rise further. Additionally, the weakening US currency and market conditions support gold prices as investors seek gold as a hedge against economic instability and inflation.

IMF Updates and China Headlines Influence Gold Price Amid Market Uncertainty

Another factor affecting gold prices is news from China and updates from the International Monetary Fund (IMF). Notably, the IMF has reduced its global real GDP growth prediction for 2023 to 2.8%, citing financial system weaknesses that could lead to a new crisis and hinder global growth.

Simultaneously, the IMF maintained its growth forecasts for China, one of the largest gold purchasers. Investors are also keeping an eye on the US Consumer Price Index for March and the latest Federal Open Market Committee Monetary Policy Meeting minutes for clues on inflation and global growth.

The broad-based US dollar declined on Wednesday as investors await US inflation data later in the day to determine when US interest rates will peak. Economists expect that US inflation will be 5.2% year-on-year in March, down from 6.0% in February, while core inflation will rise to 5.6%. Consequently, the market anticipates the Federal Reserve to raise interest rates by 25 basis points next month, followed by consistent rate decreases from July until the end of the year.