Gold futures pared declines after a U.S. government report showed the economy stalled in the first quarter, adding to speculation that the Federal Reserve will wait longer before raising interest rates.
The metal has rebounded about 6 percent since reaching its 2015 low on March 17. The next day, Fed policy makers trimmed their expectations for where rates would be by the end of the year. Officials are scheduled to issue a policy statement at 2 p.m. in Washington. U.S. gross domestic product rose at a 0.2 percent annualized rate after advancing 2.2 percent the prior quarter, Commerce Department data showed.
“At first glance, the GDP was much weaker than expected, meaning the Fed will probably keep interest rates low for longer,” Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt, said in a telephone interview. “Maybe they’ll even defer the rate hike into next year, so this should clearly be supportive for gold.”