Investing.com - Gold prices rose on Wednesday after the U.S. announced the country's gross domestic product defied forecasts and contracted in the fourth quarter of 2012, fueling already growing expectations for the Federal Reserve to continue stimulating the U.S. economy.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery were up 1.13% at USD1,681.55 a troy ounce in U.S. trading on Wednesday, up from a session low of USD1,663.75 and down from a high of USD1,683.95 a troy ounce.
Gold futures were likely to test support USD1,653.35 a troy ounce, Monday's low, and resistance at USD1,695.85, the high from Jan. 22.
The Commerce Department reported earlier that the U.S. gross domestic product contracted for the first time since the second quarter of 2009 in the three months ending December, shrinking by 0.1%.
Economists were forecasting growth of 1.1% after a 3.1% expansion in the preceding quarter, and the surprise fueled expectations that the Federal Reserve will continue with its USD85 billion monthly bond-buying program, a stimulus tool known as quantitative easing that weakens the dollar as a side effect.
A 6.6% decline in government spending and a significant drop in private inventories contributed to the contraction, which came with several silver linings.
The report added that consumer spending rose by 2.2% and business investment was 8.8% higher in the fourth quarter of last year.
Elsewhere, payroll processor ADP revealed that the U.S. private sector added 192,000 jobs in January, well above expectations for an increase of 165,000.
The combined news reports sent the dollar falling and the euro climbing, a recipe for climbing gold prices, as investors awaited the Federal Reserve's official announcement on monetary policy later Wednesday.
Meanwhile on the Comex, silver for March delivery was up 3.18% and trading at USD32.175 a troy ounce, while copper for March delivery was up 1.61% and trading at USD3.751 a pound.