Gold price holding above $1,800 as Fed’s preferred inflation measure core PCE jumps 4.7%
Welcome to Kitco News’ 2022 outlook series. The new year will be filled with uncertainty as the Federal Reserve looks to pivot and tighten its monetary policies. At the same time, the inflation threat continues to grow, which means real rates will remain in low to negative territory. Stay tuned to Kitco News to learn from the experts on how to navigate turbulent financial markets in 2022.
On a monthly basis, the core PCE price index was up 0.5% last month, the U.S. Department of Commerce said on Thursday. The inflation data was hotter than expected as consensus forecasts were calling for a 0.4% rise.
On an annual basis, core PCE jumped 4.7%, up from last month’s reading at 4.2%.
The core inflation strips out volatile food and energy prices and is the U.S. central bank’s preferred inflation measure.
The gold market has been able to hold critical gains above $1,800 through what has been a busy morning for economic data. December gold futures last traded at $1,810.80 an ounce, up 0.48% on the day.
The report said that headline inflation rose 0.6%, in November, down following October’s rise of 0.7%. Economists note that lower energy prices last month help to contribute to the month-over-month drop.
Annually, headline inflation rose 5.7%, up sharply from the previous reading at 5.1%.
According to some analysts, rising price pressures could be taking its toll on consumers. The report said that personal spending increased 0.6%, in line with consensus forecasts. At the same time, person income increased 0.4% also in line with expectations.
“These numbers are generally in-line with expectations but there are signs here that the consumer is having a hard time keeping up with inflation,” said Adam Button, chief currency strategist at Forexlive.com.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.