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

Kitco News

(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.

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