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(Kitco News) - Stronger-than-expected economic growth and softer inflation pressures appear to be weigh on gold prices.
Thursday,the U.S. Bureau of Economic Analysis said the advanced reading of second-quarter Gross Domestic Product, showed that the economy expanded by 2.4%, beating expectations. According to consensus esimates, economists were expecting to see a increase of 1.8%.
Robust growth comes after the U.S. economy grew by 2.0% in the first three months of 2023.
“The increase in real GDP reflected increases in consumer spending, nonresidential fixed investment, state and local government spending, private inventory investment, and federal government spending that were partly offset by decreases in exports and residential fixed investment,” the report said.
The gold market is struggling with renewed selling pressure following the better-than-expected economic data. August gold futures last traded at $1,968.40 an ounce, roughly unchanged on the day.
Looking at some of the components of GPD, consumer spending increased 1.6%, compared to 4.2% increase in the first quarter.
Trade was a negative on economic growth as a drop in exports overshadowed imports. U.S. exports between April and June dropped 10.8%; at the same time imports in the second quarter dropped 7.8%.
A negative for gold was a sharp drop in inflation pressures. The report said that the GDP Price index rose 2.2% in the second quarter. According to consensus estimates, economists were looking for an increase of 3.0%.
