Gold Jumps 1% on GDP Miss and Hot Inflation, Silver Up 4%
Gold jumped 1% to $5,060 per ounce after US Q4 GDP grew 1.4% annualized versus forecasts of 3%, while core PCE inflation rose 0.4% month-on-month to 3% year-over-year. Silver climbed nearly 4% to $81 as investors eyed slowing growth and sticky price pressures driving a stagflation narrative revival.
1. Precious Metals Rally
Gold prices rose 1% to reach $5,060 per ounce, while silver surged nearly 4% to $81, marking the biggest one-day increase in precious metals since earlier this year. The sharp gains reflect renewed inflows into safe-haven assets as market participants reassess economic risks.
2. Weaker GDP Growth and Hotter Inflation
US GDP expanded at an annualized 1.4% in the fourth quarter, falling short of the 3% consensus estimate and down from 4.4% in Q3. At the same time, the Personal Consumption Expenditures index rose 0.4% month-on-month, lifting core PCE to a 3% year-over-year rate, intensifying concerns over persistent price pressures.
3. Stagflation Concerns Rekindled
The combination of slowing growth and sticky inflation has reignited stagflation fears, prompting investors to seek hedges against economic stagnation and eroding purchasing power. Market strategists warn that continued divergence between growth and inflation could sustain upward pressure on precious metals.