The US economy expanded more than previously estimated during the first three months of the year, but not as sharply as previously estimated, moreover, the overall trend remains vulnerable to a new round of global economic turmoil. According to the Commerce Department, gross domestic product, the most important measure of goods and services produced across the US, advanced 1.1% at an annual pace in the first quarter, showing the weakest pace in a year. Also, the agency previously forecasted the economy rose at a 0.8% pace. The following announcement confirms that the economy has regained momentum in the second quarter. Nevertheless, uncertainty following last Thursday's "Brexit" referendum poses a risk to the growth outlook. In the meantime, the US consumers became more confident in the economy in June since the Conference Board release showed the index went up to 98 from 92.4 in May. Moreover, Americans outlook of current economic conditions was the most positive since September. However, despite the following jump in June's readings, consumers are still relatively cautious about economic growth in the short term.
Activity in the US services sector remained tepid in June, suggesting that the economy's underlying rate of growth remains lowly and that a rate hike may not be on the cards too soon. In a report, market research group Markit said that its flash services purchasing managers' index remained unchanged at 51.3 in June for the second month, falling short of expectations for a rise to a reading of 51.9. Although it remained above the 50.0 mark that separates contraction from expansion, it was well below the long-run survey average of 55.6. Meanwhile, an increase in the amount of goods flowing into the US in May likely reduced the extent to which trade will boost economic growth in the second quarter. A separate research showed that the deficit on trade with goods widened to $60.6 billion in May, compared to a $59.4 billion gap projected by analysts. Last month's reading follows a $57.5 billion trade shortfall in April, fresh numbers from the Department of Commerce reported. It turns out that exports were soft in May and imports rose. US exports inched down 0.5% to $119 billion. Imports increased 1.4% to $179.6 billion, the highest level so far this year. The rise in in-bound shipments largely reflected greater volumes of industrial supplies and consumer goods.
Upcoming fundamentals: EU Economic Summit continues
The EU Parliament is meeting for the second consecutive day to deal with the Brexit issue. There will be also data published on the other side if the Atlantic Ocean, as US monthly and year-to-year PCE core price indices for May will be out at 12:30 GMT. Last and most important is the discussion panel of the central banks, as the heads meet and talk it out in Sintra at 13:30 GMT. At the panel are set to speak various heads of banks, and among them are Federal Reserve Chairman Janet Yellen, the Bank of England Governor Mark Carney, ECB President Mario Draghi, and Brazil Central Bank Governor Alexandre Tombini.
Gold surges on Wednesday
Daily chart: Although, the market recovered on Tuesday from the Brexit induced shock last week, markets have returned to risk off sentiment on Wednesday, as, in the meantime, the yellow metal met the weekly pivot point at 1,307.95 and began to increase. The bullion started Wednesday's session at 1,310.24, and it has moved to 1,319.42 by 5:30 GMT. If the metal continues its northwards movement, it is bound to meet the monthly R2 at 1,343.10. In addition, daily aggregate technical indicators forecast a surge for the metal today.SWFX traders continue bearish sentiment
Spreads (avg,pip) / Trading volume / Volatility
Market participants foresee the price of gold at 1,275 by the end of August
Traders who were asked regarding their longer-term views on gold between May 29 and June 29 expect, on average, to see the metal around 1,275 by the end of August. Generally, 71% (+7%) of participants believe the price will be generally above 1,250 in ninety days. Alongside, 24% (-4%) of those surveyed reckon the price will trade in the range between 1,100 and 1,250 over the next three months