Gold traded higher at the opening of the Asian trading session this morning despite the US Bureau of Economic Analysis (BEA) reporting that the economy grew at a higher rate of 3.3% compared to 2% as expected by the market.
However, the price of gold managed to maintain its position above $2,020 when the economic data managed to drag it close to the level of $2,000 during the US GDP report.
In the third quarter of 2023, Gross Domestic Product (GDP) rose strongly by 4.9%.
The strong GDP report is expected to weaken the consensus supporting interest rate cuts by the Federal Reserve (Fed).
Meanwhile, positive US PMI and GDP data reflect the resilience of the US economy for now.
This could provide guidance for the Fed in setting interest rate cuts in March.
The US economy is growing well as consumer spending and strong labor demand indicate a positive outlook for tight monetary policy guidance.
This week, investors will turn their attention to the core Personal Consumption Expenditure (PCE) price index data for December which will be published at 9.30pm tonight.
For now, Fed policymakers are prioritizing core core inflation in deciding interest rate policy.
