Gold Prices Unchanged On The Day As U.S. PCE Core Inflation Rises To 2%
(Kitco News)- Goldprices remain relatively unchanged on the day as inflation pressures rise tothe Federal Reserve’s 2% inflation target last month.
Friday,The U.S. Department of Commerce said that Personal Consumption ExpendituresIndex, 0.2% in May, in line with expectations. For the year, the data showedthat inflation increased by 2.3%, up from April’s reading of 2.0%.
Coreinflation, which strips out volatile food and energy prices and is the U.S.central bank’s preferred inflation measures, increased 0.2% last month, also inline with expectations. Annual inflation increased to 2.0% last month, up from1.8% from April’s reading. This is the highest inflation reading since April 2012.
However,many economists are expecting inflation to rise past 2.0% as the Fed has saidthat it sees a “symmetrical rise” in inflation.
Thegold market has been under significant pressure throughout the week and isseeing little reaction to the inflation data. August gold futures last tradedat $1,252.20 an ounce, up 0.10% on the day.
Kathrine Judge, senior economist at CIBC World Markets, saidthat the latest inflation data supports the case that the U.S. central bankwill raise interest rates two more times this year.
However, as inflation and economic uncertainty increases,U.S. consumers are keeping a closer eye on their wallets.
The report showed that U.S. consumers saved more as they sawa rise in income. The data showed that personal spending increased 0.2%, downcompared to April's rise of 0.6%. Economists were expecting to see an increaseof 0.4%.
On the wage front, the data said that personal incomeincreased 0.4%, in line with expectations.
By Neils ChristensenFor Kitco News
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