By Ed Ballard
Gold edged lower in quiet trade Monday, paring gains recorded in the wake of weaker-than-expected U.S. economic growth data.
Gold for December delivery was recently down 0.2% at $1,354.70 a troy ounce on the Comex division of the New York Mercantile Exchange.
Prices had jumped on Friday after data showed U.S. gross domestic product grew 1.2% in the second quarter, compared with the 2.6% forecast by analysts surveyed by The Wall Street Journal.
“The gold price is still pretty much in line with where it was on Friday after the disappointing GDP figures out of the U.S.,” said Simona Gambarini, a precious metals analyst at Capital Economics.
The weak economic report undermines the case for the U.S. Federal Reserve to raise interest rates soon. Gold becomes more attractive to investors compared with yield-bearing assets when rates are low. Higher rates, or the anticipation of them, would also boost the U.S. currency, which makes this dollar-denominated metal more expensive to hold for those who use other currencies.
Ms. Gambarini said gold could rise ahead of Friday’s U.S. employment data, the next key event for traders assessing the Fed’s mood.
“Gold could rally a bit more ahead of the nonfarm payrolls, closer to Friday, as possibly expectations are that (this data) might disappoint,” she said.