FX.co ★ Gold Rises Further After PCE

Gold prices surged to approximately $4,250 per ounce on Friday, reaching a peak not seen since late October, following the release of the postponed September Personal Consumption Expenditures (PCE) data. This report, alongside the preliminary results of the University of Michigan survey, indicated a decrease in inflation expectations. Together, these factors strengthened the market's anticipation of a forthcoming interest rate cut by the Federal Reserve. PCE data showed a 0.3% increase month-on-month and an annual rise of 2.8%, while core PCE slightly decreased from 2.9% to 2.8%. This suggests persistent prices for goods but a slowdown in services inflation, indicating a cooling of fundamental inflationary pressures. The Michigan survey revealed an improvement in consumer sentiment, rising to 53.3, with one-year inflation expectations dropping to 4.1% and the five-year outlook at 3.2%, suggesting a softer trajectory for consumer price levels. Additionally, the unexpected decline of 32,000 in private payrolls, as reported by ADP, along with Challenger's announcement of 71,321 job cuts, increased the likelihood of imminent monetary easing. This context triggered strategic adjustments following prior profit-taking, thereby boosting gold's appeal.