Gold traded near $4,000 an ounce Thursday as investors assessed U.S. growth and inflation data alongside the Federal Reserve's latest decision and market pricing for a December rate increase.
FXStreet reported gold at $4,019 an ounce at 1:41 p.m. EDT (17:41 UTC), after an earlier session high of $4,069. The outlet said the price was down more than 1%. Reuters had reported spot gold at $4,035.28 an ounce at 7:21 a.m. EDT, before the U.S. releases. EconoTimes previously reported spot gold's move below $4,000 on Tuesday.
The U.S. Bureau of Economic Analysis (BEA) calculated third-quarter real gross domestic product (GDP) growth at an annualized 3.4% in its advance estimate, after 2.2% in the second quarter. Business investment, consumer purchases and government outlays added to output, while exports reduced the total.
In September, the personal consumption expenditures (PCE) price index rose 0.5% from August and stood 3.6% above its level a year earlier. The core index, which excludes food and energy, increased 0.3% on the month and 3.1% over the year.
The Federal Open Market Committee (FOMC) voted 10-2 Wednesday to keep its target range at 3.75% to 4%. Two members preferred a quarter-point increase at that meeting. The FOMC described economic activity as expanding “at a strong pace” and said inflation “remains elevated.”
Market estimates of a December increase differed by source and time. FXStreet cited an 81% probability of a quarter-point hike from Prime Terminal in its 1:41 p.m. EDT report (17:41 UTC); Reuters had cited CME FedWatch pricing of about 90% at 7:21 a.m. EDT (11:21 UTC), before the U.S. releases. Those figures reflect market pricing, not a Fed decision. Reuters reported that higher rates can make yield-bearing assets more attractive relative to gold, which pays no interest.
The FOMC is scheduled to meet Dec. 8-9, with its policy decision due Dec. 9. The BEA plans to release its second estimate of third-quarter GDP and October income and outlays data on Nov. 25 at 8:30 a.m. EST (13:30 UTC).
