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Gold Prices Remain Down As U.S. GDP Grows 4.2% In Q2

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(Kitco News) - The gold market remain under pressure as momentum in the U.S. economy pushed higher in the second quarter.

Wednesday, the second reading of second-quarter Gross Domestic Product showed the U.S. economy grew 4.2%. The data was slightly stronger than expected as consensus forecasts were calling for growth of 4%.

Gold prices were in negative territory ahead of the report, weighed down by a stronger U.S. dollar. However, the yellow metal is seeing  modest selling pressure in initial reaction to the data. December gold futures last traded at $1,209.20 an ounce, down 0.44% on the day.

According to some economists, the data showed continued broad-based strength in the U.S. economy. In the report’s second reading, personal consumption increased 3.8%, a tick lower from the previous reading of 3.9%.

At the same time business investment increased 8.5%, up from the previous estimate of 7.3%.

Exports, which boost economic activity increased 9.1%, down slightly from the initial estimate of 9.3%; however, imports, which is a drag on economic growth fell 0.4% in the second quarter, down from the previous estimate of an increase of 0.5%.

For the gold market, which is seen as a traditional inflation hedge, price pressure were in line with expectations. Core Personal Consumption Expenditures Index increased 2.0%, unchanged from the initial estimate.

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.

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