Gold Trims Loss After 3.7% Fall In Jan. U.S. Durable-Goods Orders
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Editor's Note: Updating earlier story with more details from report, comments from economist.
(Kitco News) - Gold prices pared early losses Tuesday after a Commerce Department report showingorders for durable goods in the U.S. slid by 3.7% during January.
Consensusexpectations compiled by various news organizations called for durables to bedown by around 1.7%.
Normally,weaker-than-expected data helps the precious metal since it means a reducedlikelihood of interest-rate hikes. The metal initially fell before paring itslosses, before making a comeback. In this instance, the report came out at thesame time as prepared congressional testimony from new Federal Reserve ChairJerome Powell, who seemingly hinted at continued gradual rate hikes.
As of 8:40 a.m. EST, Comex April gold was down $2.70 to$1,330.10 an ounce. The metal had been at $1,328.80 four minutes ahead of thereport.
This decrease in durablesorders follows two consecutive monthly increases.
“Orders had been showing material strength inQ3 and heading into Q4 last year, but that has turned into weakness morerecently,” said Royce Mendes of CIBC. “That being said, underlying momentumshould reaccelerate as the Trump tax cuts make it more attractive forbusinesses to add capital.”
Excluding transportation,new orders decreased 0.3%. Excluding defense, they fell 2.7%. Transportationequipment, also down following two consecutive monthly increases, led thedecrease with a decline of 10%.
Thegovernment’s durables report covers items with an expected life of at leastthree years, such as kitchen appliances, computers, furniture, autos andairplanes.
By Allen SykoraFor Kitco News
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