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Gold prices above $1,500 as U.S. PCE misses the mark

Kitco News

(Kitco News) - Gold prices are holding on to $1,500 as inflation pressures remain muted in September

Thursday, the Department of Commerce said that its Core Personal Consumption Expenditures (PCE) Index, was unchanged last month, missing expectations. Economists were forecasting a 0.1% rise. This is the second time PCE inflation has missed expectations.

Annually, core inflation, which is the Fed's preferred inflation measure increased 1.7%, down a tick from August’s reading.

Gold prices are holding on to modest gains but seeing little reaction to the weaker than expected inflation data. December gold futures last traded at $1,510.80 an ounce, up 0.94% on the day.

Some analysts have said that the weak inflation data are positive for gold prices as it will keep pressure on the Federal Reserve to maintain loose monetary policy.

Wednesday, the Federal Reserve cut interest rates for the third consecutive time since July. Following the meeting, central bank Chairman Jerome Powell said that he is in no hurry to raise interest rates. “We would need to see a significant move up in inflation before we could consider raising rates,” he said during the press conference.

Along with mixed inflation data, the report noted mixed consumer spending and income data. Although U.S. consumers are seeing an increase in their income, they are not spending that extra month.

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