Gold Prices Update – Next week will likely revolve around two major events — the U.S. Q1 GDP data and the Fed Meeting rate announcement followed by the central bank chair Jerome Powell press conference. Both are scheduled for Wednesday.
The first-quarter GDP data is likely only to be a preview of what’s really to come in the second quarter when all the lockdowns actually went into effect.
“Even though the virus-related lockdowns didn’t begin in earnest until the final two weeks of the quarter, it appears that the impact was big enough to translate into a 3.5% annualized decline in GDP for the first quarter as a whole,” said Capital Economics U.S. economist Andrew Hunter.
This will mark the first output contraction in six years and “worse is to come in the second quarter,” added Hunter.
The Fed will have an opportunity to comment on Q1 GDP data, which is what market analysts will be eyeing during Powell press conference Wednesday afternoon.
“I don’t think the Fed will continue to bring rates lower. They’ve already gone as low as they can. The commentary on where they expect growth to go and how long recovery might take will be important for sure.
The Fed has become a bank, said Meir, who does not expect any major announcement from the Fed come Wednesday. “The Fed is pretty much out of bullets. What they’re doing now is just expanding their loan portfolio. They’re just lending money to corporations, to states. They’ve become like a bank,” Meir said.
