Gold Prices Remain Under Pressure Following Weak Q4 GDP Growth
(Kitco News)- Gold prices, under pressure from renewed momentum in the U.S.,is relatively unchanged territory following weak-than-expected four-quartergross domestic product.
Friday,the U.S. Commerce Department said that the first estimate showed that the U.S.economy grew by 2.6% in the last three months of 2017. According to consensusforecasts, economists were expecting to see growth of 3.0%. The data was down from 3.2% growth seen in the third quarter.
"The deceleration in real GDP growth in the fourth quarter reflected a downturn in private inventoryinvestment that was partly offset by accelerations in PCE, exports, nonresidential fixed investment, stateand local government spending, and federal government spending," the report said.
Goldprices remain under pressure as the U.S. dollar has managed to hold on torecent gains. February gold futures last traded at $1,350.90 an ounce down0.87% on the day.
According to some economists, while the headline number wasweaker than expected, markets could be reacting to positive components of thereport.
Personal consumption saw strong growth in the fourthquarter, increasing 3.8%, up from 2.2% growth seen in the third quarter.Consensus forecasts were calling for growth of 3.7%.
Business investment in the third quarter increased 6.8%, upfrom 4.7% in the third quarter. Exports increased 6.9% in the final threemonths of the year; at the same time, imports, a drag on GPD expected 13.9%, up from a 0.7% decline in thethird quarter.
Royce Mendes, said that despite the weaker number, the U.S.economy still managed to end last year on “solid footing.”
“Overall, while the data did miss on the headline,the report still showed solid economic momentum heading into the new year. As aresult, there should be little market reaction,” he said.
By Neils ChristensenFor Kitco News
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