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(Kitco News) - The U.S. economy ended 2022 on solid footing, even if the activity was slightly weaker than expected, according to the final estimate of fourth-quarter Gross Domestic Product.
Thursday, the U.S. Bureau of Economic Analysis said the third reading of fourth-quarter GDP shows the economy grew 2.6%, down slightly from the previous estimate of 2.7%. According to consensus estimates, economists were to see an unchanged reading.
The latest revisions are not having much impact on gold as the precious metal continues to benefit from robust safe-haven demand. April gold futures last traded at $1,973.80 an ounce, up 0.35% on the day.
Analysts note that although the U.S. economy ended a challenging year with healthy activity, falling consumption highlights growing economic risks. The report said that personal consumption rose 1.0% in the final three months of last year, down from a 1.4% rise reported in the previous estimate.
Commodity analysts have also said that they don't expect the latest GDP data to have much impact on markets as investors are more focused on what the economy will look like later this summer.
There are expectations that the latest banking crisis and tightening credit conditions will push the U.S. economy into a recession by the summer. Markets expect growing economic uncertainty and financial sector turmoil will force the Federal Reserve to cut rates in June.
Analysts have said that the market calls for a rate hike this summer continue to support gold prices above $1,900.
Weaker consumption is only having a slight impact on inflation, which the report shows remains elevated. The GDP Price Index held steady at 3.6%. The Personal Consumption Expenditures (PCE) Index held steading at 3.7%. However, stripping out food and energy prices the core PCE Index rose to 4.4%, up from the second estimate of 4.3%.
