The gold price edged higher on Friday afternoon following the release of US GDP data that confirmed expectations that the economy contracted in the first three months of the year.
Spot gold was last at $1,191.80/1,192.60 per ounce, up $4 on Thursday’s close and having traded in an $8 intraday range so far.
The second estimate of US first-quarter GDP came in at -0.7 percent, slightly better than the forecast of -0.8 percent but down significantly from 0.2 percent in the first reading.
In other lacklustre readings, the Chicago PMI plunged in May to 46.2 from 52.3 in April, while University of Michigan consumer sentiment dropped to 90.7 from 95.9 in April – the biggest decline since the end of 2012.
As a result, the CME Group’s FedWatch put the odds of a rate increase in September at 25 percent, a small decrease from probability of 27 percent last Friday.
Likewise, the dollar also fairly unchanged at 1.0972 against the euro, suggesting that most of the action had already been priced in or that participants are await a September increase.
The members of the Fed’s policy board – the FOMC – are locked in what has become an increasingly public debate on when will be the right time to raise interest rates, which have been near zero since December 2008.
The market is also awaiting signals from Brussels where Greece is meeting with creditors again today to thrash out a deal to secure the funding it needs to service its debts. But the country’s inability to implement the reforms on VAT rates, pensions and budget targets has seen negotiations falter for the last few weeks.
In other metals, silver was last at $16.73/16.78 per ounce, up six cents, while platinum gained $4 to $1,115/1,120 and palladium at $783/788 was also $4 higher.
(Additional reporting by Tom Jennemman, editing by Mark Shaw)
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