Gold Prices Remain On Defensive Following 2.5% Q4 GDP
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(Kitco News)- Gold prices remain on the defensive as the U.S. economy grewin line with expectations in the final three months of the year, according tothe latest data from the Commerce Department.
Thesecond reading of fourth quarter gross domestic product showed that the U.S.economy grew by 2.5%, down slightly from the initial estimate of 2.6%. The datawas in line with consensus forecasts.
"With this second estimate for the fourth quarter, the general picture of economic growthremains the same," the report noted.
Goldprices are seeing little reaction to the data as it remains at the bottom endof its trading range. The yellow metal was dragged lower following optimistic commentsfrom Fed Chair Jerome Powell, in his first day of testimony before CongressTuesday. April gold futures last traded at $1,320.20 an ounce, up 0.11% on theday.
Consumers continue to do the heavy lifting to support theeconomy. The Commerce Department noted that personal consumption increased 3.8%in the fourth quarter, up from the previous estimate of 3.6%.
Business investment was relatively weaker increasing 6.6%,down slightly from the previous increase of 6.8%. The report also showed thattrade data continues to weigh on economic growth. Exports increased 7.1% in thefourth quarter, up from the initial estimate of 6.9%; however, imports increased14%, up from the previous estimate of 13.9%.
Positive for gold, inflation remains elevated. Gold is seenas a traditional hedge against inflation. The GDP price index came in at 2.3%,down slightly from 2.4% reported in the initial estimate. Core PersonalConsumption Expenditures remained unchanged at 1.9%.
By Neils ChristensenFor Kitco News
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nchristensen@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.