(Kitco News) – The gold market remain under pressure as momentum in the U.S. economy pushed higher in the second quarter.
Wednesday, the second reading of second-quarter Gross Domestic Product showed the U.S. economy grew 4.2%. The data was slightly stronger than expected as consensus forecasts were calling for growth of 4%.
Gold prices were in negative territory ahead of the report, weighed down by a stronger U.S. dollar. However, the yellow metal is seeing modest selling pressure in initial reaction to the data. December gold futures last traded at $1,209.20 an ounce, down 0.44% on the day.
According to some economists, the data showed continued broad-based strength in the U.S. economy. In the report’s second reading, personal consumption increased 3.8%, a tick lower from the previous reading of 3.9%.
At the same time business investment increased 8.5%, up from the previous estimate of 7.3%.
Exports, which boost economic activity increased 9.1%, down slightly from the initial estimate of 9.3%; however, imports, which is a drag on economic growth fell 0.4% in the second quarter, down from the previous estimate of an increase of 0.5%.
For the gold market, which is seen as a traditional inflation hedge, price pressure were in line with expectations. Core Personal Consumption Expenditures Index increased 2.0%, unchanged from the initial estimate.
By Neils Christensen
For Kitco News