Gold Rebounds After Disappointing US GDP

Gold futures rebounded in New York after a government report showed U.S. economic growth stalled last quarter, boosting demand for the metal as a haven.

Gross domestic product grew at a 0.1 percent annualized rate from January through March, compared with a 2.6 percent gain in the prior quarter, the Commerce Department said. Through yesterday, gold climbed 7.8 percent this year amid signs that the U.S. economy was faltering. Slowing growth also gives the Federal Reserve more leeway to continue monetary stimulus. The central bank ends a two-day policy meeting today.

“The GDP number was very disappointing, and some people are buying into the bad data,” Tommy Capalbo, a broker at Newedge Group in New York, said in a telephone interview. “Every time there is a bad number, people begin to wonder if the Fed will rethink the tapering plan.”

Gold futures for June delivery slid 0.2 percent to $1,293.20 an ounce at 8:47 a.m. on the Comex in New York. Earlier, prices fell as much as 0.9 percent.

via Bloomberg

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza