XAU/USD: Gold Slumps After Hot US GDP Report, Prices Float Back Above $1,900

Bullion fell to a 4-month low near $1,891, but gold bugs jumped in to scoop up some of the precious shiny stuff.

• Gold prices declined to $1,891 per troy ounce on Thursday as the US economy showed signs of resilience in the face of recession worries. The world’s biggest economy expanded 2.0% in the first quarter – an upward revision of a previous estimation for a 1.3% growth rate.
• The news knocked XAU/USD’s sideways momentum and added to the medium-term descending trend. Shortly after the realization that the US is chugging along nicely, gold bugs stepped in to save their darling asset. Prices were brought back above the $1,900 threshold.
• In early Friday dealmaking, gold is changing hands at around $1,906 per troy ounce. Another potential gold knocker (or maybe booster?) is today’s PCE report. PCE, short for price consumption expenditures, is the Fed’s preferred inflation gauge. The release is expected to show PCE grew 0.4% in May, flat from April’s number.