US GDP in the third quarter was lower than market expectations, boosting demand for safe-haven gold

At the Asian session that happened on Friday (October 29), spot gold held steady at around 1799. The price of gold rose slightly on Thursday (October 28), mainly due to the European Central Banks switch to eagle, the weaker U.S. dollar, and data showed that the US economic growth rate fell to the slowest in more than a year, boosting the demand for safe-haven gold, but US stocks and The sharp rise in U.S. Treasury yields limited the rise in gold prices.

The European Central Bank kept the main refinancing rates, deposit mechanism rates, and marginal lending rates unchanged. The implementation speed of the emergency bond purchase plan will be moderately slower than in the past few quarters, but it will continue at least until the end of March 2022. The inflation rate will be controlled at 2%. The asset purchase plan will continue to be carried out at a rate of 20 billion euros/month and will continue until interest rate hikes.

Lagarde said that the conditions for raising interest rates are unlikely to be met within the time frame expected by the market; the euro zone continues to recover strongly, and the economy at the end of the year will exceed the level before the epidemic; the emergency anti-epidemic bond purchase plan will last at least until the end of March next year; Inflation will be lower than 2%; inflationary pressures will ease in 2022; supply tightening and energy risks are the near-term prospects, and supply problems will be resolved next year.

The initial value of the actual annualized quarterly rate of GDP in the third quarter of the United States was 2%, which was lower than market expectations of 2.7%; as of October 23, the number of initial claims for unemployment benefits was 281,000, which was lower than the expected 290,000; core PCE prices in the third quarter The initial annualized quarterly rate was 4.5%, which was in line with expectations. The outbreak of the epidemic is the main reason for the lower-than-expected GDP.

Biden said that a historic economic framework agreement has been reached. The framework agreement includes measures related to childcare costs and the response to the climate crisis. Regarding the levy of wealthy tax, Biden expressed his hope that the richest Americans will pay a fair share of the tax. The Speaker of the U.S. House of Representatives, Pelosi, previously stated that the Democratic Party's bill can be passed in the House of Representatives and the Senate.

The U.S. dollar weakened against other major currencies. The dollar index fell to 93.36 points.