Spot gold prices climbed to $2,780 per ounce on Thursday as the U.S. economy showed signs of slowing growth in the final quarter of 2024. The Bureau of Economic Analysis (BEA) released its advance estimate for fourth-quarter Gross Domestic Product (GDP), revealing a growth rate of 2.3%, down from 3.1% in the third quarter and below economists’ expectations of 2.8%.
The weaker-than-expected GDP data highlighted a deceleration in economic activity, driven by declines in investment and exports, despite gains in consumer and government spending. The report also noted a slight uptick in inflation, with the Core Personal Consumption Expenditures (PCE) Index rising 2.5% year-over-year, in line with forecasts.
Gold, often seen as a safe-haven asset during economic uncertainty, held near session highs following the release. Spot gold last traded at $2,779.31 per ounce, up 0.70% on the day.
Key Takeaways from the GDP Report:
- Consumer Spending: Increased by 4.2% in Q4, up from 3.7% in Q3 and surpassing economists’ expectations of 2.9%.
- Inflation: The advance GDP Price Index rose 2.2% quarter-over-quarter, slightly below the anticipated 2.5%.
- Investment and Exports: Both sectors saw downturns, contributing to the overall slowdown in economic growth.
The gold market’s positive reaction to the GDP data underscores investor concerns about the U.S. economy’s resilience amid slowing growth and persistent inflationary pressures. As economic indicators continue to shape market sentiment, gold remains a focal point for investors seeking stability.