Gold losses Relax after Weak U.S. GDP data
Gold prices fell on Thursday after investors speculated that the Federal Reserve would cut interest rates following stagnant growth in the US economy in the first quarter.
Quick overview
- Gold prices fell on Thursday as investors speculated on potential interest rate cuts by the Federal Reserve due to stagnant US economic growth.
- Spot gold traded below $3,300 an ounce but is still on track for its fourth monthly gain, with a nearly 6% increase in April.
- US economic data showed contraction, reinforcing the case for further cuts to the Fed's funds rate, currently near 0.25%.
- Traders are closely monitoring the Core Personal Consumption Expenditures Price Index, which remains above the Fed's 2% inflation target.
Gold prices fell on Thursday after investors speculated that the Federal Reserve would cut interest rates following stagnant growth in the US economy in the first quarter.
Spot gold traded below $3,300 an ounce, but remains on track for its fourth monthly gain. Gold is up almost 6% in April despite earlier declines of over 1%
US data showed economic contraction, adding to the case for further cuts to the Fed’s funds rate, now hovering near 0.25%. Gold trades near this week’s lows, XAU/USD quoted at $3,290.According to the US Department of Commerce, the country struggled to sustain economic growth. The GDP figure for Q1 of 2025 was released lower than market expectations, adding further challenge for the Fed, which is trying to contain the inflation rate back towards the 2% target.
The precious metal is still on the rise, but sellers appear to be gaining ground as XAU/USD dropped below $3,300; it is still unable to break through the most recent swing low of $3,261 on April 23. If the latter is violated, the $3,200 mark and the $3,150 mark will be revealed.
Investors anticipated aggressive cuts of 100 basis points, bringing the Fed funds rate down to approximately 3.45%.
Traders who focus on bullion watch the Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s favored determinant of inflation. The numbers went down, like most analysts had predicted; however, they are still over the Federal Reserve’s target of 2%.
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