The U.S. Commerce Department reported on Friday that the U.S. economy grew at a 1.2 percent annual rate in the second quarter, much less than expected, as inventory investment fell for the first time in nearly five years.
Gold edged down slightly on Monday, after rising over one percent to a near 3-week high in the previous session, as equities rose and the dollar recovered from lows hit after disappointing U.S. growth figures last week. Spot gold fell 0.3 percent to $1,346.89 an ounce at 0056 GMT.
Bullion hit a high of $1,355.10 on Friday, its highest level since July 12. U.S. gold was down 0.3 percent at $1,354 an ounce. The U.S. Commerce Department reported on Friday that the U.S. economy grew at a 1.2 percent annual rate in the second quarter, much less than expected, as inventory investment fell for the first time in nearly five years.
Asian shares ticked up slightly on Monday, while the dollar index, which tracks the greenback against a basket of six rival currencies, was up 0.1 percent at 95.654, crawling away from its Friday low of 95.384, its lowest since July 5.
The Federal Reserve should not overreact to Friday’s weaker-than-expected U.S. GDP report, but needs to consider more data before contemplating another interest rate increase, Dallas Fed President Robert Kaplan said.
The Federal Reserve could raise interest rates up to two times before year end, San Francisco Fed President John Williams said on Friday as he downplayed data that showed the U.S. economy grew far less than expected in the last quarter.
Hedge funds and money managers increased their net long position in silver contracts for the seventh straight week, but cut net long position in gold futures and options, in the week to July 26, U.S. Commodity Futures Trading Commission data showed on Friday.
Holdings in Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.40 percent to 958.10 tonnes on Friday.