(Kitco News) - The gold market is struggling to hold on to gains even as U.S. economic activity was slightly weaker than expected in the final three months of 2023.
The U.S. Bureau of Economic Analysis (BEA) said Wednesday that its second estimate of fourth-quarter Gross Domestic Product showed that the economy expanded by 3.2%. The data was slightly weaker than expected, as economists were looking for an unchanged reading at 3.3%.
Although the headline data missed consensus forecasts, some economists note that the economy remains relatively healthy, driven by solid consumption.
“The increase in real GDP reflected increases in consumer spending, exports, state and local government spending, nonresidential fixed investment, federal government spending, and residential fixed investment that were partly offset by a decrease in private inventory investment. Imports, which are a subtraction in the calculation of GDP, increased,” the report said.
The gold market remains constrained below $2,050 an ounce and is largely ignoring the latest GDP data. April gold futures last traded at $2,045.10 an ounce, roughly flat on the day.
The report noted that personal consumption rose 3.0% in the fourth quarter and continues to drive the U.S. economy. Consumption increased from the initial estimate of 2.8%.
Not only did growth slow unexpectedly, but the report noted an increase in inflation. The report said that the core Personal Consumption Expenditures Price Index rose 2.1% in the fourth quarter, up from the initial estimate of 2.0%
Although the U.S. economy is holding up fairly well, some market analysts have said that recession fears have not completely faded.
