Forex Marketz Daily Forex News – Fully Markets Update
This morning, gold prices, fell lower on Friday. Weaker inflation data, out of the United States, along with consumer spending data put another interest rate raise by the Federal Reserve under some doubt.
As of 1:30 pm EST, the price of spot gold (XAU/USD) lost 0.23 percent at $1,283.96 per ounce. U.S. gold futures shed 0.16 percent to $1,286.60 per ounce. Spot gold is now on track to record a 2.8 percent decline for the month of September. This is its largest monthly fall in 2017. It is its biggest monthly loss since November 2016. The US dollar strengthened.
The bullion is on track to finish the quarter 3.5 percent higher. The yellow metal did rally in July and August. This was, in part, due to geopolitical tensions including missile and nuclear tests out of North Korea.
Gold Traders Eye Economic Data
Recent economic data, out of the United States, showed that inflation was still tepid in August. The core personal consumption expenditures (PCE) price index was up 1.3 percent annually. This is after it rose by 1.4 percent in July.
The core PCE is the Federal Reserve’s go too inflation measure. The PCE has a two percent Fed target. The bullion is sensitive to rising US interest rates. When this increases the opportunity cost of holding the non-yielding yellow metal is hurt, while boosting the dollar.
Friday’s data, however, hardly dimmed prospects of a Fed interest rate hike. Fed funds futures currently price in almost a 71 percent probability of an interest rate hike in December. This is compared to the 76 percent earlier.
This could mean that more downside in gold could be limited.
We have these looming geopolitical tensions regarding North Korea, and Iran, that can come into the headlines at any given time. This could be supportive of the yellow metal.
