On May 29, 2025, the U.S. Bureau of Economic Analysis (BEA) released its second estimate for Q1 2025 GDP, confirming a contraction of 0.3%, consistent with the advance estimate. This marks the first negative GDP growth since the pandemic-induced downturn in 2020. The decline was primarily attributed to a surge in imports ahead of anticipated tariffs and a decrease in government spending, which outweighed gains in consumer spending and private investment.
Today’s given signal : https://t.me/calendarsignal/18764
Key Drivers Behind the Negative GDP
- Surge in Imports: Businesses accelerated imports, particularly pharmaceuticals and capital goods, to preempt upcoming tariffs. Since imports are subtracted in GDP calculations, this surge significantly dragged down the overall figure.
- Decrease in Government Spending: Federal government expenditures, especially in defense, declined, contributing to the GDP contraction.
- Inventory Accumulation: While private inventory investment increased, it wasn’t sufficient to offset the negative impact of rising imports.
Impact on Gold (XAU/USD)
The negative GDP data has heightened expectations of a dovish shift in Federal Reserve policy, potentially leading to interest rate cuts. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, making it more attractive to investors. Consequently, gold prices have shown an upward trend, with spot prices hovering around $3,300 per ounce.
Here is the chart showing the historical relationship between .S. GDP growth and gold price trends from 2015 to 2024:
- Blue line shows annual U.S. GDP growth.
- Orange line represents gold price trend (Down, Up, Up Strong).
Previous released data results :
On last GDP data (30-4-2025) we predicted bad data, & as per that we suggest to BUY XAUUSD & as a result, we made a profit of 84.5 points according to the signal we gave.
Check the previous blog : Gold Moves Explained: The Role of GDP and PCE in Shaping XAU/USD – ForexTrade1
Check last given signal : https://t.me/calendarsignal/18231
Performance : https://t.me/calendarsignal/18252
Where to contact us :
Website : www.forextrade1.co
Twitter : www.twitter.com/forextrade11
Telegram : telegram.me/ftrade1
Facebook : www.facebook.com/Forextrade01
Instagram : www.instagram.com/forextrade1
YouTube : www.youtube.com/ForexTrade1
Skype : forextrade01@outlook.com
Email ID : info.forextrade1@gmail.com
Discord : https://discord.gg/vEk98ZvrHP
LinkedIn : https://www.linkedin.com/company/forextrade11