Gold prices recovered some of their losses after U.S. first quarter economic growth was revised lower. Gold is trading at 1235.25 gaining $5.45 this morning. The US’s gross domestic product, the broadest measure of all goods and services produced in the economy, grew at a 1.8% annual rate between January and March, the Commerce Department said Wednesday. This was less than earlier readings and below the 2.4% gain forecast by economists.
Gold yesterday dropped sharply and hit 3-year lows, on growing expectations that the US Federal Reserve will slow the pace of economic stimulus later this year and continued liquidation from ETF’s. Gold holdings of SPDR gold trust, the largest ETF backed by the precious metal, declined to 969.5 tons, as on June 26.
Silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 9,890.87 tons, as on June 26. The US dollar index, which measures the greenback against six other major currencies, rose to 82.964 from 82.553 on late Tuesday in North America. The dollar index posted its sixth straight session of gains. The USD eased a bit in the Asian session.
Eurozone bonds rose across the board, after European central bankers reassured markets they would keep exceptional monetary policy measures for the foreseeable future. The euro pared some of the losses against the dollar, after final data showed US gross domestic product growth was more tepid than previously estimated in the first quarter, but was held back by a moderate pace of consumer spending, weak business investment and declining exports. The People’s Bank of China said on late Tuesday, it had provided cash to some institutions facing temporary shortages and would continue to do so if needed.
Industrial metals prices slipped yesterday however, recovered some ground on concerns about the outlook for demand from top consumer China as moves by the country’s central bank to ease fears of a credit crunch failed to fully reassure investors. Industrial metals prices are trading higher on international bourses today. Traders can expect a further rise in the prices of metals on account of bargain hunting at lower levels. Silver is trading at 18.733 recovering along with gold this morning as buyers continue to take advantage of low prices.
Copper is trading at 3.057 trading in the green as traders take advantage of the weakened US dollar. The dollar declined by a few pips making low priced commodities a special appealing. Copper closed lower on the London Metal Exchange yesterday, weighed by concerns over Chinese metals demand and a weaker-than expected reading on U.S. economic growth.