Gold Under Pressure Following Release of US GDP and Jobless Claims Data
Gold prices weakened in trading Thursday evening following the release of stronger-than-expected US economic data. The US Department of Commerce reported that gross domestic product (GDP) grew 3.8% in the second quarter, higher than the initial estimate. This growth was driven in part by household consumption and a decline in imports, adding to positive sentiment regarding the resilience of the world's largest economy.
Meanwhile, initial jobless claims fell to 218,000 for the week ending September 20, lower than the previous period. This figure indicates that the US labor market remains quite solid, despite concerns about a slowdown in other sectors.
The combination of strong GDP data and declining jobless claims has led market participants to believe that the Federal Reserve is in no hurry to cut interest rates. Expectations of higher interest rates for a longer period have pushed up US bond yields, thereby reducing gold's appeal as a non-yielding asset.
However, analysts believe that pressure on gold could be limited as global geopolitical factors continue to maintain safe-haven demand. Tensions between NATO and Russia and the escalating conflict in Ukraine have the potential to trigger capital flows back into gold if risk appetite increases. Investors are now awaiting US inflation data and further comments from Fed officials for the next direction in the gold market.
Source: Newsmaker.id
