Following the strong GDP growth in the second quarter, Wall Street analysts predicted a sharp contraction in economic recovery in the third quarter. They said US GDP will grow by just 2.8%, well below the previous 6.7%. But the data published by the US Department of Commerce indicated a gain of only 2.0%.
Apparently, there is a downtick in consumer spending, which affected real GDP. Non-repayable loans from the government also decreased.
All in all, the Q3 GDP is down 4.7% from the previous quarter, and is the slowest economic growth since the start of the 2020 recession.
And with inflation hitting its highest since 2009, it is likely that the Federal Reserve will postpone its plan of raising rates earlier than anticipated.
Initially, they did not consider a rate hike in 2020, 2021 or 2022, but recently they said there may be one or two as early as 2022. But as noted earlier, the combination of high inflation and slowing economic growth will make it extremely difficult for the Fed to raise rates next year. If the Fed's decisions are indeed data-driven, it should come as no surprise that they will backtrack on their decision to accelerate the timeline for normalizing interest rates. It can also postpone the planned cut in their monthly bond purchases.
It is for this reason that analysts believe that there is no technical resistance at $ 1,836. As such, gold could climb to $ 1,836, or even jump as high as $ 1,920. If this happens, the yellow metal will exceed $ 1,900 for the first time since August.
