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Gold continues its climb as U.S. Q2 GDP comes in below expectations
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(Kitco News) -
Lower-than-expected economic growth is helping to boost gold prices this morning.
The U.S. Bureau of Economic Analysis (BEA) announced on Wednesday that the second reading of second-quarter Gross Domestic Product showed that the economy expanded by 2.1%, which was below expectations. According to consensus estimates, economists were expecting to see a reading of 2.4%, in line with the first estimate.
“The increase in real GDP reflected increases in consumer spending, nonresidential fixed investment, state and local government spending, and federal government spending that were partly offset by decreases in exports, residential fixed investment, and private inventory investment. Imports, which are a subtraction in the calculation of GDP, decreased,” the report said.
The BEA said that the updated estimates “primarily reflected downward revisions to private inventory investment and nonresidential fixed investment that were partly offset by an upward revision to state and local government spending.”
The gold market is continuing its upward trajectory following the slightly worse-than-expected economic data. Spot gold last traded at $1,944.45 an ounce, up 0.36% on the day and up around $5 since just before the release.
Looking at some of the components of the GPD report, consumer spending increased 1.7%, compared to the 1.6% increase in the first estimate.
The BEA's featured measure of inflation, the price index for gross domestic purchases, increased 1.7 percent in the second quarter, a downward revision from the 1.9% print from the previous estimate. Excluding food and energy, gross domestic purchases prices increased 2.4 percent, down 0.2 percentage points from the 2.6% in the first estimate.
The price index for personal consumption expenditures (PCE) increased 2.5 percent in the second quarter, a downward revision of 0.1 percentage point from the previous estimate. Excluding food and energy, the core PCE price index increased 3.7 percent, down from 3.8% in the first estimate.
