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Gold price is making its way to daily highs as U.S. annual core PCE disappoints in November

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(Kitco News) Gold was trading back in the green after the U.S. annual core PCE price index came in short of expectations in November, advancing 1.4% versus 1.5%.

On a monthly basis, the core PCE price index was up 0.0% in November versus the expected 0.1%, the U.S. Department of Commerce said on Wednesday.

The core inflation strips out volatile food and energy prices and is the U.S. central bank’s preferred inflation measure.

Gold edged up into positive territory, rising towards its daily highs. February Comex gold futures were last trading at $1,872.0, up 0.09% on the day. 

The report also showed that personal consumption was down 0.4% in November. October’s data was downwardly revised to 0.3%.

On top of that, personal income fell 1.1% in November, following an upwardly revised drop of 0.6% in October. Economists were expecting to see a drop of just 0.3%.

“The November estimate for personal income and outlays was impacted by the response to the spread of COVID-19. Federal economic recovery payments slowed as pandemic-related assistance programs continued to wind down,” the report said.

Economists warn that the December numbers might be even worse considering new lockdown measures and still surging coronavirus cases.

“December is likely to prove even more challenging for consumer spending as some states are moving to tighten restrictions on activity during the holidays as new Covid cases continue to skyrocket, while mobility data shows that people are spending less time outside of their homes,” said CIBC Capital Markets economist Katherine Judge.

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