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Q1 U.S. GDP falls 5%, in line with expectations

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(Kitco News) - The gold market remains under pressure even after data showed the U.S. economy contracting in the first quarter, in line with expectations.

Thursday the final reading of U.S. Gross Domestic Product showed that the U.S. economic growth fell 5% in the first quarter. The data was in line with expectations and unchanged from the previous forecast.

The decline comes after the U.S. economy grew 2.1% in the fourth quarter of 2019.

The gold market is not seeing much movement in initial reaction to the data as prices hover in negative territory. August gold futures last traded at $1,768, down 0.40% on the day.

The components of first quarter GDP held little surprises. Consumer spending fell 6.8% in the first three months of the year, unchanged from the previous reading.

Looking at inflation numbers, the report said that core Personal Expenditures Index, the Federal Reserve’s preferred inflation measure, which strips out energy and food costs, rose 1.7%, up from the previous reading of 1.6%.

Adam Button, chief market strategist at Forexlive.com said that markets are not paying attention to first quarter data.

“The market is looking towards Q3 now and it's on track to be the worst quarter on record,” he said.

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