(Kitco News) - The gold market continues to trade around $3,400 an ounce and is holding its ground even as U.S. economic activity showed a slight improvement in the second quarter.
The second reading of second-quarter U.S. Gross Domestic Product indicated the economy grew 3.3% between April and June, an improvement from the initial estimate of 3.0% growth.
The data came in better than expected, as economists had forecast GDP growth of 3.1%.
“Real GDP was revised up 0.3 percentage point from the advance estimate, primarily reflecting upward revisions to investment and consumer spending, which were partly offset by a downward revision to government spending and an upward revision to imports,” the report said.
The gold market is not seeing much reaction to the stronger-than-expected economic data. Spot gold last traded at $3,401.70 an ounce, up 0.18% on the day.
Although the data beat expectations, some economists note that its impact is muted because it continues to show the same trade-induced volatility seen in the initial estimate.
Lower imports and an increase in exports have skewed the data; however, personal consumption remains weak, and investment is still in contraction territory.
The report said consumer spending rose 1.6%, compared to the initial estimate of 1.4%.
While U.S. growth remains relatively subdued, inflation pressures persist. The report noted that the GDP Price Index’s preliminary reading showed inflation rising 2.0%, unchanged from the initial estimate.
Meanwhile, the Core Personal Consumption Expenditures Index showed inflation rising 2.5%, also unchanged from the initial estimate.
