Gold Moves Little After U.S. 3Q GDP Growth Reported At 3.5%
(Kitco News)- Gold held a slight gain but moved little after a government report Friday showedthat U.S. gross domestic product rose by a seasonally adjusted annual rateof 3.5% in the third quarter.
Thiswas the government’s first estimate of economic growth for theJuly-September quarter, showing that growth slowed some from 4.2% in the secondquarter. Consensus forecasts compiled by new organizations had called for third-quarterGDP growth of 3.3% to 3.4%.
Thereading was boosted by consumer spending, which increased by 4%.
Inflationcooled, the data showed. The closely watched core personal consumptionexpenditure index, excluding food and energy, came in at a 1.6% annual rate,down from 2.1% in the second quarter. The overall price consumptionexpenditures index also rose 1.6%, down from 2%.
“The advance [in GDP] was driven by anotherstrong reading on household spending, which shot ahead by a full 4%,” saidRoyce Mendes of CIBC Economics. “The other major driver of growth was a robustrebound in inventories, which had seen a drawdown in the prior quarter asforeign buyers pulled ahead purchases in an attempt to get ahead of their owncountry’s retaliatory tariffs on U.S. goods. Exports, however, suffered in thequarter for the same reason as outbound shipments came back down to earthfollowing that artificial boost.”
The data showed that business fixed investment wasflat, which Mendes said is “possibly a sign that the most potent effects of thetax cuts are now in the rearview mirror.”
Asof 8:47 a.m. EDT, spot gold was trading up 70 cents for the day to $1,232.30 anounce. The metal had been at $1,233 five minutes before the report.
Thegovernment releases three estimates of GDP. The second estimate, based on morecomplete data, is due out on Nov. 28.
By Allen SykoraFor Kitco News
Follow @AllenSykora
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