Gold Market Ignores In-Line Rise In U.S. Q1 GDP
(Kitco News) - The gold market is holding on to $1,400 but is down on the day, after U.S. economy continued to show resilant strength during the first three month of the year.
Thursday, the third and final reading of U.S. Gross Domestic Product showed that the U.S. economy grew 3.1% in the first quarter, in line with economist expectations and unchanged from the previous estimate.
The gold market is seeing its second day of technical selling and is seeing little reaction to the latest economic data. However, gold prices continue to trade above critical support areas. August gold futures last traded at $1,409.30 an ounce, down 0.44% on the day.
Personal consumption was significantly weaker than expected in the first quarter, increasing 0.9% in the first three months, revised down from a 1.3% increase in the previous estimate.
However, business investment was stronger than expected increasing 4.4%, up from the previous estimate of 2.3%.
Trade was also mixed with exports increasing 5.4% in the first quarter, up from the previous estimate of 4.8%; meanwhile, imports were slightly stronger than expected, showing a negative reading of 1.9%, up from the previous estimate of -2.4%.
Inflation was also hotter than expected with the core Personal Consumption Expenditures Index increasing 1.2% in the first three months of the year, up from the initial estimate of 1.0%. The GDP Price Index rose 1%, up from the initial estimate of 0.8%.
Adam Button, managing director at Forexlive.com said that aside from consumer spending, the U.S. economy looks relatively healthy.
“It's amazing that we're talking about a near-term rate cut. The higher inflation revisions should be an argument against it,” he said.