(Kitco News) – The gold market remains above $ 1,700 an ounce even as the U.S. economy ended 2020 on a high note.
The U.S. Department of Commerce said in its third reading of fourth-quarter GDP on Thursday that the U.S. economy grew 4.3%, up from the previous estimate of 4.1%. However, the data was better than expected as economists sought an unchanged reading.
“The upward revision mainly reflected an upward revision in private investment in inventories which was partially offset by a downward revision in non-residential fixed investment,” the report said. “The increase in GDP in the fourth quarter reflects both the continued economic recovery from the sharp declines recorded earlier in the year and the continued impact of the COVID-19 pandemic, including new restrictions and closures that are in effect in parts of the United States.
Better than expected data does not have much impact on gold prices. As a late reaction, gold prices hit their session low. June gold futures last traded at $ 1,726.10 an ounce, down 0.54% on the day.
Besides the stronger-than-expected headline data, the report didn’t have much good news for the gold market as inflation pressure remains subdued. The report says the GDP price index fell to 2.0%, down from the previous estimate of 2.1%. Meanwhile, the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditure Index (PCE) showed price pressures up 1.3% in the fourth quarter, down from the previous quarter. previous estimate of 1.4%.
Although activity has been stronger than expected, many economists note that the latest report is retrospective as investors contemplate first quarter growth.
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