GOLD (June 30) drop to session low as U.S. GDP grows 2% in Q1
Ahead of the latest GDP report, the gold market was already struggling to hold support as prices continued to trade at a three-month low. The initial reaction shows gold remains weighed down by the positive data. August gold futures last traded at $1,908, down 0.74% on the day.
On the inflation front, the PCE price index was relatively unchanged, rising 4.1%, compared to the previous estimate of 4.2%. Core PCE, which strips out volatile food and energy prices, was a tick lower than expected, rising 4.9%, compared to consensus forecasts of 5.0%.
Consumer demand continues to drive U.S. growth. The report said that consumer spending on durable goods increased 16.3%, up from a 1.3% decline in the fourth quarter of 2022. Overall, consumer spending rose 4.2%, up from the previous estimate of 3.8%.
On the inflation front, the PCE price index was relatively unchanged, rising 4.1%, compared to the previous estimate of 4.2%. Core PCE, which strips out volatile food and energy prices, was a tick lower than expected, rising 4.9%, compared to consensus forecasts of 5.0%.
Consumer demand continues to drive U.S. growth. The report said that consumer spending on durable goods increased 16.3%, up from a 1.3% decline in the fourth quarter of 2022. Overall, consumer spending rose 4.2%, up from the previous estimate of 3.8%.
Comment:
Friday, the U.S. Department of Commerce said its core Personal Consumption Expenditures price index increased 0.3% last month, compared to April's increase of 0.4%. The inflation rose in line with economists' expectations.
Meanwhile, inflation in the last 12 months rose 4.6%, down a tick from April's 4.7% increase. Annual inflation was slightly cooler than expected as economists forecasted an unchanged reading. However, looking at the broader trend, inflation remains stubbornly high, more than double the Federal Reserve's target of 2%.
Meanwhile, inflation in the last 12 months rose 4.6%, down a tick from April's 4.7% increase. Annual inflation was slightly cooler than expected as economists forecasted an unchanged reading. However, looking at the broader trend, inflation remains stubbornly high, more than double the Federal Reserve's target of 2%.
On the other hand, any positive move above the $1,913 level or an overnight high could face resistance near the $1,924-$1,925 range, before reaching the $1,936 area. Sustained strength above that could trigger a short-term rally towards the $1,962-$1,964 barrier, on the way to the supply zone of $1,970-$1,972.