Gold surges above $5,060 as soft GDP, hot PCE hit US Dollar

💡 DMK Insight

Gold’s 1% rally signals a shift in market sentiment as economic growth slows. The recent deceleration in US economic growth, coupled with inflation surpassing 3%, is a critical moment for traders. This combination typically drives investors towards safe-haven assets like gold, especially as the Fed’s stance on interest rates comes into question. With the Core PCE Index being a key indicator for the Fed, rising inflation could lead to a more cautious approach from policymakers, potentially stalling rate hikes. Traders should keep an eye on the $1,950 resistance level for gold; a sustained break above could indicate further bullish momentum. Conversely, if gold retraces below $1,900, it might signal a short-term correction. Here’s the flip side: while gold is gaining traction, equities could face pressure as investors reassess risk. If inflation continues to rise without corresponding wage growth, consumer spending may falter, impacting corporate earnings. Watch for upcoming economic data releases, particularly employment figures, which could further influence both gold and stock market dynamics.