Gold Prices Snap Five-Week Winning Streak, U.S. GDP in Focus

New York (Jan 20)  Gold prices snapped a five-week winning streak with the precious metal down 0.26% to trade at 1334 ahead of the New York close on Friday. The losses come despite continued weakness in the greenback with the DXY (Dollar Index) down nearly 0.4% as all three major US equity indices closing markedly higher on the week. 

Looking ahead to next week traders will be eyeing central bank rate decision from the BoJ (Bank of Japan) and the ECB (European Central Bank) with the advanced read on 4th quarter U.S. GDP highlighting the economic calendar. Consensus estimates are calling for a print of 3%, down from 3.2% q/q in Q3 with Core PCE (Personal Consumption Expenditure) expected to rise to 1.9% q/q. 

With the inflation outlook remaining the laggard of the Federal Reserve’s dual mandate of maximum employment and price stability, a stronger print on these data point next week could see interest rate expectations increase with such a scenario likely to weigh on gold demand. That said, prices have turned just ahead of resistance and although the broader picture remains constructive, the rally remains vulnerable near-term.

DailyFX