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Gold prices in neutral territory following 0.4% rise in U.S. core PCE

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(Kitco News) - Gold prices are stuck in neutral trading but are near session highs as inflation pressures last month rose in line with expectations.

On a monthly basis, the core PCE price index was up 0.4% in February, the U.S. Department of Commerce said on Thursday. The inflation data was in line with consensus forecasts.

For the year, core inflation rose 5.4%, up from January's increase of 5.2%.

The gold market is not seeing much reaction to the latest inflation data. June gold futures last traded at $1,938.30 an ounce, roughly unchanged on the day.

While inflation pressures appear to have cooled slightly last month, some economists note that the economic environment has changed significantly since Russia's invaded Ukraine in the last few days of February.

"All this is before the Ukraine war, so it's old news in a sense," said Adam Button, chief currency strategist at

The conflict in Eastern Europe has roiled commodity markets, driving prices higher, which many analysts have said will cause a further rise in inflation through the rest of 2022.

Gold price could fall $100 as safe-haven premium weakens but prices won't collapse – Natixis

Although inflation pressure were relatively tame last month, consumer spending was weaker than expected. The report said that personal consumption rose 0.2% in February, down from January's massive jump of 2.1%. Economists were expecting to see a 0.5% increase.

Some economists have said that U.S. consumption could hit through the rest of the year as rising inflation destroys consumers' purchasing power.

However, the one bright spot for the U.S. economy is the fact that Americans have some savings to see them through some of this uncertainty. The report said that personal income last month rose 0.5%, up from January's unchanged reading. The increase was in line with consensus forecasts.

Although recession risks have risen steadily in March, many economists have said this is an unlikely scenario as consumers remain "well cashed up."

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