Gold Trading Reminder: Rising Crazy! Two bulls encouraged bulls, and gold prices hit a new record high

Daocheng Technology Financial News - Friday (March 29)Spot goldThe market was closed for the Good Friday holiday. Gold prices hit another record high on Thursday and recorded their best monthly performance in more than three years, helped byFederal Reserveinterest rate cutExpected and strong demand for safe haven.

Spot gold rose 1.74% to 2232.78 ounce on ThursdaydollarGold rose 9% in March, its best monthly performance since July 2020, and its second consecutive quarter of gains. U.S. gold futures closed up 1.2% at $2238.4 an ounce.

(Daily chart of spot gold)

Interest rate cut expectations + safe-haven buying help gold prices rise

TD SecuritiescommodityDaniel Ghali, strategist, said gold prices were buoyed by traders "adjusting their positions ahead of the holidays and [increasing] trading activity towards the end of the month and quarter".

Ghali added that if the market starts to anticipateFederal ReserveThe rate cut cycle will be even bigger, and gold could rise further and potentially "hold on to these highs, but we do see signs of buying drying up recently".

Everett Millman, chief market analyst at Gainesville Coins, said another reason for the rise in gold prices was that "global geopolitical tensions remain," which could prompt investors to buy gold as a neutral reserve asset.

Follow US PCE data

The US core personal consumption expenditure (PCE) price index will be released on Friday, which may help investors gauge the Federal Reserve's policy stance. The market currently expects the core PCE released on Friday to slow to 0.3% from 0.4% month-on-month. The year-on-year growth rate is still above the Federal Reserve's 2% target and is expected to remain unchanged at 2.8%.

According to CME Group's FedWatch tool, traders currently project a 64% chance of a rate cut in June.

The U.S. economy grew 3.4% faster than expected in the fourth quarter, continuing to lead the pack among developed countries

Overnight data showed that the U.S. economy grew 3.4% faster than expected in the fourth quarter, continuing to lead the developed world.Dollar indexStill very strong. The dollar index rose 0.25% to close at 104.55 on Thursday, hitting a new high of nearly a month and a half to 104.73 during the session.

The U.S. economy grew faster than previously expected in the fourth quarter, supported by strong consumer spending and business investment in non-residential buildings such as factories and medical facilities.

The Commerce Department report released on Thursday also showed solid profit growth in the last quarter, driven by non-financial companies. Higher profits, combined with higher worker productivity, could encourage companies to retain staff and extend the economic expansion.

The economy has shrugged off recession fears, growing faster than the rest of the world's developed world despite slowing momentum. Since March 2022, the Federal Reserve has raised interest rates by 525 basis points to curb inflation.

The report also showed that core inflation pressures eased in the last quarter, but did not change expectations that the Federal Reserve would start cutting interest rates in June.

"The economy is in good shape," said Bill Adams, chief economist at Comerica Bank. "The economy is running more smoothly than it did during the epidemic and during the epidemic."

In its final estimate of fourth-quarter gross domestic product, the Commerce Department's Bureau of Economic Analysis said GDP grew at an annualised rate of 3.4 per cent in the quarter, up from 3.2 per cent previously reported. The revision reflects upward revisions to consumer spending, business investment and state and local government spending, offsetting inventory build-up and downward revisions to exports. Economists polled by Reuters had expected no revisions to the annualised rate of quarter-on-quarter GDP growth.

The economy grew by more than 1.8 percent, a pace that Fed officials don't see as spurring an acceleration in inflation. Growth in the third quarter was 4.9 percent on an annualized basis and 2.5 percent in 2023, an acceleration from 1.9 percent in 2022. Quarter 1 growth is expected to be about 2.0 percent on an annualized basis. Core inflation fell to 2.0 percent from 2.1 percent in the last quarter.

Consumer spending, which accounts for more than two-thirds of US economic activity, grew at 3.3 per cent, contributing 2.2 percentage points to GDP growth, up from a previous estimate of 3.0 per cent. Services growth was revised upwards.

Initial jobless claims in the states fell by 2,000 to a seasonally adjusted 210,000 in the week ending March 23, according to a separate report from the Labor Department. Economists had expected 212,000. Despite a series of high-profile layoffs at the start of the year, jobless claims have hovered between 20-21.3 million since February. Renewal jobless claims rose 24,000 to 1.819 million in the week ending March 16, the report showed. The week came during the government's Marchnon-agriculturalDuring the survey period of the employment report.

The University of Michigan Consumer Confidence Index rose to its highest level since July 2021, climbing to 79.4, beating expectations of 76.5. Sales of homes for sale recovered in February after plunging -4.7% in January, rising 1.6% month-on-month, beating market expectations of 1.5%.

Due to the closure of the gold market on Friday, there may be a gap market opening next Monday, and investors need to be vigilant.