Friday not only marked the end of the week of the week but also the last trading day of the month. The precious metals were steady early in the session, although many experts expected more volatility given the expiration of various options and a disappointing report of how much the U.S. economy expanded during the first quarter.
Spot gold traded slightly higher at $1,265/oz this morning while spot silver lost 1¢ per ounce to $17.35/oz. Platinum added 0.3% to trade near $950/oz and palladium was roughly 0.9% higher, approaching $825/oz.
GDP Under the Weather
The Commerce Department reported on Friday that the U.S. economy grew at a mere 0.7% clip during the first quarter of 2017, the weakest quarter of growth in three years. It was a surprise that gold didn’t see more action after the disappointing GDP number, but the announcement helped cool off the stock market. The Nasdaq, which recently crossed the 6,000-point threshold for the first time in the index’s history, ran ahead of its counterparts at 0.25% higher on Friday morning. Global stock indices were mixed while the U.S. bond market was flat. The dollar was about 0.15% lower (98.9) on the DXY index.
The GDP data for Q1 was well below consensus expectations of 1%, and lagged well behind the 2.1% expansion the previous quarter. The first-quarter slump is a bit of a seasonal trend: Wells Fargo points out that since the turn of the millennium, GDP growth in the first quarter of each year has averaged only 1%; the other three quarters of the year, the average over that same period is 2.2%. This is often blamed on the weather, however tired this explanation becomes. While exports rose slightly more than imports during Q1, consumer spending rose at its slowest pace since 2009.
Another factor that should have an impact on gold is an important holiday in the East. Today is Akshaya Tritiya for followers of the Jain and Hindu faiths, one of the biggest gold-buying events of the year because the occasion is believed to be auspicious for beginning new ventures or financial commitments. In other words, believers often see the holiday as a good time to buy gold. This helps give a lift to the already considerable amount of gold demand that comes from India and the surrounding region.
The opinions and forecasts herein are provided solely for informational purposes and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.