PRECIOUS-Gold rises as soft US GDP report offsets hotter inflation data

By Anmol Choubey

Feb 20 (Reuters) - Gold prices rose on Friday after U.S. gross domestic product data came in below expectations, even as inflation data surprised to the upside, while investors also watched rising geopolitical tensions between the United States and Iran.

Spot gold XAU= was up 0.8% at $5,039.42 an ounce by 09:04 a.m. (1404 GMT). U.S. gold futures GCcv1 for April delivery were up 1.3% at $5,060.10.

U.S. economic growth slowed sharply to a 1.4% annualized rate in Q4, well below economists’ forecast of 3%, as the government shutdown and softer consumer spending hit activity.

Separately, the Personal Consumption Expenditure index, the Federal Reserve's preferred inflation gauge, rose 0.4% in December, on a month-over-month basis, compared to economists' estimate of a 0.3% rise.

"The big 'miss' on Q4 GDP and concerns over private credit thanks to Blue Owl is protecting gold from a core PCE reading that is the highest in almost a year," said Tai Wong, an independent metals trader. "The Fed might just get its popcorn and watch the early summer films from the sidelines."

Blue Owl Capital OWL.N shares fell about 4% in pre‑market trading after the asset manager’s plan to return capital from a small debt fund unsettled investors and pressured rivals.

Gold, considered a safe-haven asset when there is geopolitical and economic uncertainty, also tends to do well when interest rates are low.

Traders still expect two 25 basis points rate cuts by Fed this year, with first expected in June. FEDWATCH

On the geopolitical front, U.S. President Donald Trump warned Iran on Thursday it must make a deal over its nuclear program or "really bad things" will happen.

Goldman Sachs said a recent slowdown in central bank gold buying should be temporary and expects gold to climb toward $5,400 by end-2026.

Elsewhere, spot silver XAG= gained 3.1% to $80.76 an ounce. Spot platinum XPT= rose 2.4% to $2,120.85, while palladium XPD= added 1.7% to $1,714.18.