Gold prices remained subdued during Asian trading on Wednesday as investors awaited the release of high-impact United States first-quarter gross domestic product (GDP) data for fresh direction.
By 3:30 pm AEST (5:30 am GMT) spot gold prices were down by $5.80 or 0.2% to 3,310.97 per ounce.
Markets expect the advance reading of U.S. GDP to reflect a sharp slowdown, with growth anticipated at just 0.4% for Q1 2025, a significant drop from the 2.4% expansion recorded in Q4 2024.
The anticipated deceleration has been largely attributed to a surge in imports, as U.S. businesses front-loaded inventories in response to the Trump administration's tariff measures.
An unexpected GDP contraction could reignite fears of a looming recession and revive expectations of aggressive interest rate cuts by the Federal Reserve.
Such a scenario would likely pressure the U.S. dollar lower, providing fresh support to gold.
Still, traders are expected to remain cautious ahead of Friday’s U.S. nonfarm payrolls (NFP) report, which could offer further insight into the labour market impact of recent tariffs and influence the Fed’s policy path.
Attention will also be on the quarterly core personal consumption expenditures (PCE) price Index, due alongside the GDP data, as it remains the Fed’s preferred inflation gauge.
Meanwhile, the U.S. dollar maintains modest gains after President Trump signed an executive order aimed at easing the effects of his newly imposed auto tariffs.
