PCE meets expectations, gold poised for a downward reversal?
This Thursday, we received July's US core PCE price index annual rate data (announced 4.2%, expected 4.2%, previous 4.2%), matching expectations.
Additionally, US personal spending for the month exceeded predictions (announced 0.8%, expected 0.7%, previous 0.6%). This represents the most significant increase since January 2023.
Furthermore, the number of initial jobless claims in the US for the week ending August 26th (announced 228,000, expected 235,000, previous 232,000) reached a new low since the week of July 29th.
Moreover, US layoffs in August, as reported by the Challenger company, stood at 75,151, which is higher than the previous figure of 23,697. Lastly, the Atlanta Fed's GDPNOW model revised its Q3 GDP growth forecast for the US downward to 5.6%. Later today at UTC+8 20:30, the US non-farm payroll figures for August (previous 187,000, forecast 170,000) and US unemployment rate data (previous 3.5%, forecast 3.5%) could potentially sway the market.
My interpretation of the data: Post the PCE data release (one of the Fed's favorite inflation indicators), the overall market reaction wasn't significant. The PCE precisely matches predictions and the CPI data for the month falling below expectations are slightly incongruent. However, with the CPI data trending downward and the PCE data release coming later than the CPI, the market had adjusted mainly its expectations, leading to a muted reaction.
In comparison to the PCE, the US personal spending rate for July might be more telling. The July spending rate recorded an increase of 0.8%, surpassing the 0.7% expectation and marking the most significant rise since January 2023. Many analysts believe this spending growth could be linked to the recent overheated state of the US stock market. The wealth effect on investors could have boosted consumer sentiment. This could potentially have a positive impact on forthcoming inflation figures and might intensify expectations of the Fed raising interest rates.
The current initial jobless claims number at 228,000, which is the lowest since the week of July 29th, indicates that the labor market remains tight. This bolsters expectations of the Fed raising rates, which is positive for the US dollar and negative for gold. With three labor market data points released this week, tonight's non-farm payroll figures are worth watching.
Following the data release, the US dollar strengthened, but gold experienced a slight dip. Currently, gold is hovering around the upper boundary of its daily downward channel. The daily and four-hour RSI stand at 57.8 and 57.92, respectively, which are relatively high. Gold is also nearing the upper band of the Bollinger Bands. Multiple indicators suggest a potential downward reversal trend for gold.
https://www.tradingview.com/x/9xXDKDtN/
Additionally, US personal spending for the month exceeded predictions (announced 0.8%, expected 0.7%, previous 0.6%). This represents the most significant increase since January 2023.
Furthermore, the number of initial jobless claims in the US for the week ending August 26th (announced 228,000, expected 235,000, previous 232,000) reached a new low since the week of July 29th.
Moreover, US layoffs in August, as reported by the Challenger company, stood at 75,151, which is higher than the previous figure of 23,697. Lastly, the Atlanta Fed's GDPNOW model revised its Q3 GDP growth forecast for the US downward to 5.6%. Later today at UTC+8 20:30, the US non-farm payroll figures for August (previous 187,000, forecast 170,000) and US unemployment rate data (previous 3.5%, forecast 3.5%) could potentially sway the market.
My interpretation of the data: Post the PCE data release (one of the Fed's favorite inflation indicators), the overall market reaction wasn't significant. The PCE precisely matches predictions and the CPI data for the month falling below expectations are slightly incongruent. However, with the CPI data trending downward and the PCE data release coming later than the CPI, the market had adjusted mainly its expectations, leading to a muted reaction.
In comparison to the PCE, the US personal spending rate for July might be more telling. The July spending rate recorded an increase of 0.8%, surpassing the 0.7% expectation and marking the most significant rise since January 2023. Many analysts believe this spending growth could be linked to the recent overheated state of the US stock market. The wealth effect on investors could have boosted consumer sentiment. This could potentially have a positive impact on forthcoming inflation figures and might intensify expectations of the Fed raising interest rates.
The current initial jobless claims number at 228,000, which is the lowest since the week of July 29th, indicates that the labor market remains tight. This bolsters expectations of the Fed raising rates, which is positive for the US dollar and negative for gold. With three labor market data points released this week, tonight's non-farm payroll figures are worth watching.
Following the data release, the US dollar strengthened, but gold experienced a slight dip. Currently, gold is hovering around the upper boundary of its daily downward channel. The daily and four-hour RSI stand at 57.8 and 57.92, respectively, which are relatively high. Gold is also nearing the upper band of the Bollinger Bands. Multiple indicators suggest a potential downward reversal trend for gold.
https://www.tradingview.com/x/9xXDKDtN/
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