(Kitco News) - The gold market is seeing some selling pressure but remains well supported above $1,800 an ounce following stronger-than-expected economic growth in the third quarter.
The U.S. economy grew more than expected between July and September, the U.S. Bureau of Economic Analysis reported on Thursday. The third estimate showed that the U.S. Q3 GDP rose 3.2%, handily beating expectations for an unchanged reading at 2.9%.
Positive economic activity in the third quarter came after a weak start in the first half of the year with two negative readings of -1.6% and -0.6% in Q1 and Q2, respectively.
“The updated estimates primarily reflected upward revisions to consumer spending and nonresidential fixed investment that were partly offset by a downward revision to private inventory investment,” the report said.
The better-than-expected data is taking a modest toll on gold; however, prices are still holding solid support above $1,800 an ounce. Feburary gold futures last traded at $1,822.50 an ounce, down 0.16% on the day.
Along with solid economic activity during the summer, the report highlighted persistently high inflation. The third-quarter Price Index rose 4.4%; economists were expecting to see an increase od 4.3%.
Core inflation during the quarter rose 4.7%, a tick higher compared to the previous estimate of 4.6%.
The report also noted resilient consumer demand in the third quarter. Consumer spending increased 2.3%, up sharply from the 1.7% increase in the second reading.
Although third-quarter economic data was healthier than expected, some economists have said that it won’t impact current expectations that the U.S. is still headed for a recession.
