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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 showing orders for durable goods in the U.S. slid by 3.7% during January.

Consensus expectations compiled by various news organizations called for durables to be down by around 1.7%.

Normally, weaker-than-expected data helps the precious metal since it means a reduced likelihood of interest-rate hikes. The metal initially fell before paring its losses, before making a comeback. In this instance, the report came out at the same time as prepared congressional testimony from new Federal Reserve Chair Jerome 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 the report.

This decrease in durables orders follows two consecutive monthly increases.

“Orders had been showing material strength in Q3 and heading into Q4 last year, but that has turned into weakness more recently,” said Royce Mendes of CIBC. “That being said, underlying momentum should reaccelerate as the Trump tax cuts make it more attractive for businesses to add capital.”

Excluding transportation, new orders decreased 0.3%. Excluding defense, they fell 2.7%. Transportation equipment, also down following two consecutive monthly increases, led the decrease with a decline of 10%.

The government’s durables report covers items with an expected life of at least three years, such as kitchen appliances, computers, furniture, autos and airplanes.

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