Gold price remains under pressure as PCE inflation remains muted - Kitco NEWS

(Kitco News) - Strong selling pressure in the gold market continues, even as the yellow metal sees little reaction to disappointing inflation data.

The Commerce Department said on Friday that consumer prices as measured by core personal consumption expenditures (PCE) price index, which excludes volatile food and energy prices, rose 0.1% last month, down from Decemberâ??s 0.2% rise. The data was weaker than expected as economists were expecting to see a 0.2% rise.

For the year, inflation rose 1.6%, down from Decemberâ??s annual increase of 1.7%.

Gold is seeing little reaction to the data as prices hover just off session lows. April gold futures last traded at $1,624.40, down 1% on the day.

The latest consumption data showed that consumers saw a rise in their paychecks with income in January rising 0.6%, handily beating expectations. Economists were expecting to see a 0.3% increase.

However, consumers were holding on to more of their cash as personal spending rose 0.2%. Economists were expecting to see a 0.3% rise. Taking some of the sting about the weaker spending data, December’s numbers were revised up to 0.4%.

“US consumers appear to have started 2020 on a cautious note,” said Katherine Judge, senior economist at CIBC.

Many economists are looking past the mixed consumer data as they try to anticipate how the spreading coronavirus will impact future growth.

“Overall, the US economy was in a solid place early in the year but coronavirus is a black swan that could change everything,” said Adam Button, managing director at Forexlive.com.

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2020-02-28 13:34:00Z
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