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Gold price holding steady gains below $1,900 following muted U.S. PCE inflation data

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(Kitco News) - Gold prices remain under $1,900 an ounce but holding on to some gains as inflation pressures rise in line with expectations.

Friday, the Department of Commerce said that its Core Personal Consumption Expenditures Index, increased 0.2% in September, up from August’s 0.3% increase; the data was in line with economists’ consensus forecasts.

For the year, inflation is up 1.5%; however the rise was slightly weaker than expected.

The gold market is not seeing much reaction to the latest consumer inflation data. December gold futures last traded at $1,881.80, up 0.74% on the day.

While inflation remains fairly muted, the report noted that consumers saw their income rise after significant drop in August. The report said that personal income rose 0.9% in September, up from August’s 2.7% drop. The data also beat expectations with consensus forecasts calling for a 0.3% rise.

Looking at consumption, the report said that personal spending increased 1.4% last month, up from August’s 1.0% rise. Economists were expecting to see a 1.0% rise.

According to some analyst the latest inflation and spending data is a mixed bag for the gold market. Although the low inflation doesn’t help gold as an inflation hedge, it does mean that the Federal Reserve has room to pump more stimulus into financial markets.

Some analysts have also said that gold investors should not pay much attention to consumer inflation data. They note that this will be the last sector to see higher prices. Right now the inflation is impacting other sectors like real estate, equity markets and raw commodities.

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