(Kitco News) – Inline, U.S. economic data is being pushed to the back burner as the gold market continues to see a strong safe-haven bid.
Thursday, the Bureau of Economic Analysis said that the preliminary estimate showed that the U.S. Q4 GDP rose 7.0%, meeting market expectations. Economic activity is up one tick compared to the initial estimate of 6.9%.
“The updated estimates primarily reflected upward revisions to nonresidential fixed investment, state and local government spending, and residential fixed investment that were partly offset by downward revisions to personal consumption expenditures (PCE) and exports,” the report said.
The gold market is not seeing much reaction to the latest economic data as prices have seen significant gains after Russia invaded Ukraine overnight. April gold future last traded at $1,964.30 an ounce, up 2.82% on the day.
While the latest GDP numbers showed little surprise for investors, the report noted that inflation remains a significant concern. The preliminary GDP Price Index increased 7.1%, up from the previous estimate of 6.9%. Economists were expecting to see an unchanged reading.
At the same time, the PCE price index excluding food and energy prices increases 5.0%, up from the previous estimate of 4.9%.
“The inflation numbers are continued to ratchet higher, but overall, the market has much more to worry about than what was happening 2-5 months ago in the U.S. economy,” said Adam Button, chief currency strategist at Forexlive.com.
Although it appears that the U.S. economy ended 2021 on solid footing, many economists have noted that economic activity has slowed in the first quarter of 2021 due to the ongoing COVID-19 pandemic.
Some economists have said that soaring inflation and growing market uncertainty could weigh on GDP through 2022.
The report noted that personal consumption was slightly weaker than expected, increasing 3.1% in the fourth quarter, down from the initial estimate of 3.3%.
Trade also weighed on growth. The report said that imports increased 17.6% in the last three months of 2021, up from the initial forecast of 17.5%. At the same time exports rose 23.6% in the fourth quarter, down from the previous estimate of 24.5%.
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2022-02-24 13:39:00