Gold prices struggling to stay positive following weak consumption data, rise in inflation
In its latest report, the Department of Commerce said that the core Personal Consumption Expenditures Index rose 0.1% in May, up from the 0.4% decline reported in April. The data was stronger-than-expected as economics were forecasting an unchanged reading. For the year, core PCE was unchanged, rising 1.0% last month.
The gold market dipped into negative territory on the day in initial reaction to the latest inflation data. August gold futures last traded at $1,770.20 an ounce, relatively unchanged on the day.
The data also shows that U.S. consumers continue to struggle as the nation tries to deal with the economic fallout of the coronavirus. The report said that personal spending rose 8.2% last month, up from April’s revised decline of 12.6%. However, the rise was weaker than expected as consensus forecasts were calling for an increase of 8.9%.
The report did show a slight improvement in personal income last month. Income dropped 4.2% in May, down from April’s revised increase of 10.8%. The drop was less than expected as economists were forecasting a drop of 6%.
Jim Wyckoff, senior technical analyst at Kitco.com said that gold prices are not reacting much to the latest economic data. He explained that gold is seeing some technical selling pressure after prices hit a nearly 8-year high earlier in the week.