A significant contributor to the subdued GDP growth was the notable surge in imports, which are deducted when calculating GDP. However, it's essential to note that import estimates are subject to volatility and potential revisions.
One explanation for the recent uptick in mortgage rates is attributed to the Federal Reserve's perceived lack of progress in curbing inflation. The latest GDP report has only added to this sentiment of disappointment, with the implicit Personal Consumption Expenditures (PCE) deflator increasing at a 3.3% annual rate in the first quarter. Although the year-over-year rate stood at 2.5%, slightly better than the quarterly increase, it remains above the Fed's 2% target.
The stagnation in inflation progress has prompted a significant shift in market expectations regarding the Fed's future actions. This change in sentiment, coupled with the weaker GDP data, has spurred upward movement in gold prices, leading to a test of the 2334-2335 zone.
Currently, the gold price is consolidating at 4hr time frame within the range of 2335-2300. Should the gold price break above the 2335 level, it may present a buying opportunity. Conversely, a short scalp trade could be considered if the price falls below 2326.
As traders navigate these evolving market dynamics, careful analysis of both fundamental economic indicators and technical chart patterns is crucial in formulating effective trading strategies in the gold market.