Second quarter GDP numbers beat expectations as precious metals demand weakens.

Wednesday morning, Real GDP numbers for the second quarter came in higher than expected at 3% vs 2.6% expected. While investors and economists were projecting much better than the first quarter’s reading of -0.5%, the upside surprise is a good sign for domestic markets. The largest contributor to Real GDP coming in higher than expected was a larger-than-expected decline in imports (a decline in imports results in a positive contribution to GDP). Consumer spending was the other notable contributor to the positive result. On the flip side, investment fell more than 2% in the second quarter. On the inflation front, both the Gross Domestic Purchases Price Index and PCE Price Index fell in the second quarter to roughly 2%. Overall, it was a good morning of data for the US economy prior to the FOMC interest rate decision in the afternoon.

On the back of a large trade deal agreed upon with the European Union, uncertainty in the market seems to be declining. Precious metals, which were on fire leading up the onset of tariffs, have slowed down in their ascent. This could very well be a period of consolidation following such a strong upside move, however, the SPDR Gold Trust (GLD) has seen its fund score fall to 3.84 after a multi-month period with a score above 5.0. The absolute technical picture still looks strong for GLD despite trading on a sell signal as the fund has a YTD gain of 26.48% and trades near all-time highs. Nonetheless, with recent US economic data coming in strong and less uncertainty regarding tariffs, demand for precious metals has decelerated over the last few months. Below support at $300 and $295, there is no support offered on GLD’s default chart until $240.