On Thursday, U.S. government data showed that the nation’s economy contracted 1.4% in the most recent quarter. Inflationary pressures and persistent labor shortages are taking a toll on the economy. The first quarter GDP contrasts with last year’s 5.7% economic growth. Furthermore, the surging inflation has driven the Fed to commit to a half percentage point interest rate hike in May.
Gold prices soared on the news that the economy had retreated. Gold prices jumped, with the June gold futures up 0.30% on the day at $1,894.40 per ounce. In addition, reflecting upon the yellow metal’s appeal as a safe-haven asset amid current economic uncertainties created by the geopolitical crises, inflation, and supply chain issues, global gold demand rose 34% in the first quarter. Also, gold prices in U.S. dollars for the same quarter climbed 5% on average both quarterly and annually.
