Gold is down, maintaining a defensive tone within the well defined range. The yellow metal is being weighed by heightened risk appetite, driven by tax cut optimism, which keeps focus on frothy stocks.
U.S. personal income rose 0.4% in October, above expectations of +0.3%. PCE also bested expectations, although moderated considerable from the negative revised +0.9% in September.
Core PCE inflation — the Fed’s preferred measure of inflation — rose to 1.4%, but remains well below the 2.0% target. Inflation has been trending lower this year, which prompted the central bank to pause the tightening cycle in September.
So, does this uptick signal a reversal of that trend, or merely a brief reprieve? That’s a question the FOMC will have to wrestle with in a couple weeks.
The dollar index was unable to sustain a probe above the 100-day moving average in earlier trading, keeping focus on the downside. Continued weakness in the dollar should help protect the low end of the range in gold as well.