Gold price falls to new daily lows as key inflation indicator misses expectations

(Kitco News) Gold fell to new daily lows after the U.S. annual core PCE price index came in at 3.5% in June versus the consensus forecast of 3.7%.

On a monthly basis, the core PCE price index was up 0.4% in June versus the expected 0.6%, according to the data published by the U.S. Department of Commerce on Friday.

The core inflation strips out volatile food and energy prices and is the U.S. central bank’s preferred inflation measure.

Gold dropped following the data release, hitting new daily lows. December Comex gold futures were last trading at $1,826.10 an ounce, down 0.53% on the day.

The report also showed that real personal consumption was up at 0.5% in June after falling 0.6% in May. Personal income was up 0.1% last month, beating the consensus call for a drop of 0.3%.

“The increase in personal income in June primarily reflected an increase in compensation of employees. Government social benefits decreased in June. Within compensation, the increase was primarily in private wages and salaries, reflecting Bureau of Labor Statistics Current Employment Statistics,” the report said.

June’s report reveals more proof of rising price pressures, but they don’t seem to be weighing on real consumption too much, said Capital Economics chief U.S. economist Paul Ashworth.

“We now expect third-quarter real consumption growth to be around 3% annualized, with GDP growth at 4%,” Ashworth said.

Live 24 hours gold chart [Kitco Inc.]

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