{"id":200511,"date":"2023-12-22T12:00:00","date_gmt":"2023-12-22T17:00:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/?p=200511"},"modified":"2023-12-22T12:07:19","modified_gmt":"2023-12-22T17:07:19","slug":"gold-prices-up-1-after-us-pce-data-softer-than-expected","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/commodities\/gold-prices-up-1-after-us-pce-data-softer-than-expected\/","title":{"rendered":"Gold Prices Up 1% After US PCE Data Softer than Expected"},"content":{"rendered":"\n

Gold rose 1% to the highest point in over two weeks after Fed’s preferred inflation gauge came in softer-than-expected.<\/strong><\/p>\n\n\n\n

The core personal consumption expenditures (PCE) price index climbed 3.2%<\/a> on an annual basis in November, lower than estimated. The headline PCE rate also fell last month, pushing gold and equity prices higher on Friday.<\/p>\n\n\n\n

CPE Sees First Monthly Decine Since April 2022<\/h3>\n\n\n\n

The core PCE price index, the Fed\u2019s preferred inflation gauge that disregards food and energy prices, rose 3.2% year-over-year in November, marking a softer increase than the 3.3% expected by economists and down from the 3.5% in October. Month-on-month, this inflation measure rose 0.1%, in line with estimates. <\/p>\n\n\n\n

On a six-month basis, core PCE climbed 1.9%, suggesting that the Fed\u2019s \u2018higher for longer\u2019 interest rate plan is successfully slowing inflation. As such, analysts believe the central bank is on track to bring it down toward the 2% target.<\/p>\n\n\n\n

\n

\u201cAdding in the further sharp slowdown in rent inflation still in the pipeline, it\u2019s hard to see any credible reason why the annual inflation rate won\u2019t also return to the 2% target over the coming months.\u201d\u2013 wrote Andrew Hunter, deputy chief U.S. economist at Capital Economics.<\/p>\n<\/blockquote>\n\n\n\n

The headline PCE, which includes food and energy costs, fell 0.1% on the month and rose just 2.6% from a year ago. This print marks a sharp decline from the 7% peak in mid-2022. It was also the first monthly decline since April 2022. <\/p>\n\n\n\n

Most importantly, the latest PCE report marks the latest development, showing that the Fed no longer needs to raise interest rates. The central bank said<\/a> at its meeting last week that it expects to implement rate reductions totaling 0.75 percentage points in 2024<\/a>. Markets believe the first cut may come as soon as March. <\/p>\n\n\n\n

The consumer price index (CPI) also fell to 3.1%<\/a> in November amid waning energy prices<\/a>.<\/p>\n\n\n\n

Spot Gold Rises 1%, Sets Sight at $2,070<\/h3>\n\n\n\n

Unsurprisingly, another better-than-expected inflation data report boded well for many highly-traded assets, including gold.<\/p>\n\n\n\n

Spot gold prices were up 1% at $2,066 at the time of writing, the highest point since December 4. As a result of this ascent, the bullion broke above the crucial resistance at $2,060 and is anticipated to continue its upward momentum towards $2,070 amid deepening expectations of a dovish pivot.<\/p>\n\n\n\n

US stocks also increased at the market open, with the S&P 500 climbing over 0.3% to 4763. Bitcoin was down 1% at $43,431, while the 10-year Treasury bond yield fell to 3.87%. <\/p>\n\n\n\n

—<\/p>\n\n\n\n

Originally Posted December 22, 2023 – Gold Prices Up 1% After US PCE Data Softer than Expected<\/a><\/p>\n\n\n\n

Disclosure:<\/strong> Tim Fries has no positions in any of the stocks mentioned, and has no plans to initiate any positions within the 72 hours following the publishing of this article. This article expresses the opinions of Tim Fries. Tokenist Media LLC has no position in any of the stocks mentioned, and does not plan to initiate any positions within 72 hours of the publishing of this article. Please consult our website policy for more information.<\/p>\n","protected":false},"excerpt":{"rendered":"

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