- Preliminary US Q2 GDP comes in at 3.0%
- Comfortably above 2.7% exp or 2.6% prior
- Gold prices fall back towards $1300 but remain above key breakout level
An impressive rise in personal consumption has boosted the latest GDP figures from the US with a 3.0% rise seen in the preliminary reading for the second quarter. With a prior reading of +2.6% and a consensus forecast for a rise of 2.7% there’s little doubt that this number is a clear positive for the US and, when taken in conjunction with the strong ADP beat could well come to the aide of the beleaguered US dollar.
After a worrying drop in personal consumption seen last time out, this key component of US GDP rose strongly in Q2. Source: Macrobond, XTB Research
Gold has been one of the best performing commodities this year, with the continued turmoil within the White House and more recently the escalating North Korea situation causing investors to seek out the safe haven asset.
The first two days of the week have seen large moves higher in the price of Gold, but after hitting a 2017 peak yesterday’s rally fizzled out to leave a rather ugly looking candle on D1. With a strong ADP print and now a better than expected GDP release there is a case to be made for some weakness in Gold going forward.
However, the longer term trend remains in tact. A daily chart shows that the recent trade has marked a potentially major breakout above 1295 and this area could now become key support. As long as price remains above here then further gains are possible with the high from the US election night at 1337 the first level overhead to look for possible swing resistance.
Gold has broken out of a triple top formation recently. 1295 could now become key support. Source: xStation
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