Gold Moves Little After U.S. 3Q GDP Growth Reported At 3.5%
(Kitco News) - Gold held a slight gain but moved little after a government report Friday showed that U.S. gross domestic product rose by a seasonally adjusted annual rate of 3.5% in the third quarter.
This was the government’s first estimate of economic growth for the July-September quarter, showing that growth slowed some from 4.2% in the second quarter. Consensus forecasts compiled by new organizations had called for third-quarter GDP growth of 3.3% to 3.4%.
The reading was boosted by consumer spending, which increased by 4%.
Inflation cooled, the data showed. The closely watched core personal consumption expenditure index, excluding food and energy, came in at a 1.6% annual rate, down from 2.1% in the second quarter. The overall price consumption expenditures index also rose 1.6%, down from 2%.
“The advance [in GDP] was driven by another strong reading on household spending, which shot ahead by a full 4%,” said Royce Mendes of CIBC Economics. “The other major driver of growth was a robust rebound in inventories, which had seen a drawdown in the prior quarter as foreign buyers pulled ahead purchases in an attempt to get ahead of their own country’s retaliatory tariffs on U.S. goods. Exports, however, suffered in the quarter for the same reason as outbound shipments came back down to earth following that artificial boost.”
The data showed that business fixed investment was flat, which Mendes said is “possibly a sign that the most potent effects of the tax cuts are now in the rearview mirror.”
As of 8:47 a.m. EDT, spot gold was trading up 70 cents for the day to $1,232.30 an ounce. The metal had been at $1,233 five minutes before the report.
The government releases three estimates of GDP. The second estimate, based on more complete data, is due out on Nov. 28.