The Daily Market Report: Gold Consolidates After Second Consecutive Weekly Gain

31-Oct (USAGOLD) — Gold is narrowly confined after ending last week on a positive note; it was the second consecutive weekly gain. Action sto start the week has been relegated to the upper half of Friday’s range.

The Fed starts their 2-day FOMC meeting tomorrow. While it is widely anticipated that the Fed will not make a move on Wednesday, the market will hope for further clarification about the prospects for a December hike.

The market has pretty much bought into the notion that a policy tightening is warranted before year end, but data out today shows the Fed would pretty much have to ignore the absence of inflation to do so. The PCE chain price index rose 0.2% in September, in line with expectations. That leaves the annual rate of inflation at 1.2%, well shy of the Fed’s 2.0% target. This may prompt the Fed to keep their cards close the vest later this week.

Both Chicago PMI and the Dallas Fed index disappointed as well. Even with the support of market expectations and last week’s Q3 advance GDP beat, I think a December rate hike is still a long way from a sure-thing.

We also have the October jobs report coming out on Friday. Median expectations are for 174k payroll gains and for the unemployment rate to tick back down to 4.9%. The market as usual wil give the jobs data an inordinate amount of scrutiny.