Gold prices surged in domestic and foreign markets ahead of the release of US GDP statistics and the personal consumption expenditures price index, which are expected to reveal that the world’s largest economy’s development is slowing.
The PCE data from the United States is the Federal Reserve’s favoured inflation gauge. The data will most likely be closely monitored by the central bank.
If economic growth in the United States slows, the Federal Reserve may reconsider its monetary policy plan in the following months. The market anticipates that the central bank will suspend its rate hike cycle in June, following a 25-basis-point increase in May. This is good news for gold prices because gold is a non-yielding metal that performs well when interest rates are low or do not rise further.