US Dollar Trims Early Gains After US Q4 GDP Report, Gold Nudges Higher – DailyFX

US dollar and gold analysis and price

• The U.S. economy remained strong in the fourth quarter of 2023.
• After the announcement, the US dollar fell and gold rose slightly.

The second forecast released today showed that the U.S. economy expanded steadily at 3.2% in the fourth quarter, but this was lower than market expectations of 3.3%. Although current Q$ expectations are lower than the strong 4.9% seen in Q3, the US economy remains in very strong shape and interest rates remain at current levels to sustainably bring inflation back on target. This confirms the Fed’s current position of maintaining it for the long term. .

According to the U.S. Bureau of Economic Analysis,

“The increase in real GDP reflected increases in personal consumption, exports, state and local government spending, non-residential fixed investment, federal government spending, and residential fixed investment, partially offset by a decline in private inventory investment. ” Imports, which are a deduction in GDP calculations, increased. ”

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After the announcement, the US dollar depreciated slightly, but the movement was minimal. The dollar started to rise in early trading today, thanks in part to technical support from the 200-day simple moving average. Traders will now focus on Thursday’s U.S. PCE data, the Federal Reserve’s preferred measure of inflation.

US dollar index daily chart

Gold prices rose slightly after the announcement, but remain in a narrow short-term trading range. Resistance is seen at just under $2,044/oz. Meanwhile, support is seen at $2,025/oz. Above $2,010/oz.

gold price daily chart

Charts by TradingView

According to data from individual traders, 62.45% of traders are net long, giving a long-to-short ratio of traders of 1.66:1.The number of traders who are net long increased by 8.38% from yesterday and by 0.70% from last week. Meanwhile, the number of traders who went net short was 10.27% lower than yesterday and 10.22% lower than last week.

Let’s see what this means for gold

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