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(Kitco News) –
Gold prices are trading near session lows this morning after the latest data showed the U.S. economy grew in line with expectations, while consumers curtailed their spending more than expected.
The U.S. Bureau of Economic Analysis (BEA) announced on Thursday that the final reading of second-quarter Gross Domestic Product showed that the economy expanded by 2.1%, which met economists’ expectations and was unchanged from the second estimate.
Looking at some of the components of the GPD report, consumer spending was revised down sharply, increasing only 0.8% compared to the 1.7% increase in the second estimate.
“The update primarily reflected a downward revision to consumer spending that was partly offset by upward revisions to nonresidential fixed investment, exports, and inventory investment,” the report said. “Imports, which are a subtraction in the calculation of GDP, were revised down.”
The gold market sold off somewhat following the GDP data and is trading near session lows. Spot gold last traded at $1,872.47 an ounce, down around $5 since just before the release and down 0.1% on the day.
The BEA’s featured measure of inflation, the price index for gross domestic purchases, was revised down 0.3% from the 1.7% print in the second estimate.
The price index for personal consumption expenditures (PCE) was unrevised from the 2.5% reading in the previous estimate. Excluding food and energy, the core PCE price index was also unchanged from the second estimate at 3.7%.
“The increase in real GDP reflected increases in nonresidential fixed investment, consumer spending, and state and local government spending that were partly offset by a decrease in exports,” the BEA added.
The report also contained significant revisions to the Q1 GDP. “For the first quarter of 2023, real GDP is now estimated to have increased 2.2 percent, an upward revision of 0.2 percentage point from the previously published estimate,” they said. “An upward revision to nonresidential fixed investment was partly offset by a downward revision to consumer spending.”
The price index for gross domestic purchases in Q1 is now estimated to have increased 3.6%, a downward revision of 0.2 percentage points. The PCE price index increased 4.2%, which is 0.1 percentage points higher than previously published. Excluding food and energy, the PCE price index in Q1 increased 5.0%, 0.1 percentage points higher than the previous estimate.
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