Gold surges to new record high in quiet holiday trading today. The precious metal continues to be supported by expectation of global central bank easing ahead. SNB has already started rate cutting earlier this month. ECB is widely expected to follow in Spring, probably in June. Whether Fed is going to cut two or three times this year, the cycle will start anyway.
Inflation is looking more like a rear-mirror thing now, and benchmark treasury yields also dip notably recently because of that. US 10-year yield now looks more likely heading back to 4% handle, rather than 4.4%. Germany 10-year yield is back pressing 2.3%, comparing over 2.45% earlier in the month. US 10-year yield is also back to 3.95%, comparing to above 4.2% earlier in the month.
Geopolitical risks is another factor support Gold as there is not end of seen yet with Russian invasion of Ukraine, Israel/Hamas conflicts, nor Houthi’s Red Sea attacks. In addition, US election in November approaching, with far-fetching implications.
Technically, immediate focus is now on 100% projection of 1614.60 to 2062.95 from 1810.26 at 2258.61. Decisive break there would pave the way to 161.8% projection at 2535.69. This level coincides with long term target of 100% projection of 1160.17 to 2074.84 at 1614.60 at 2529.27. So in short, overcoming 2250 handle would send Gold through 2500 mark. In any case, near term outlook will stay bullish as long as 2156.88 support holds.
US PCE price index rises to 2.5% yoy in Feb, core PCE down to 2.8% yoy
US personal income rose 0.3% mom or USD 66.5B in February, below expectation of 0.4% mom. Personal spending rose 0.8% mom or USD 145.5B, above expectation of 0.8% mom.
PCE price index rose 0.3% mom below expectation of of 0.4% mom. Core PCE price index (excluding food and energy) rose 0.3% mom, matched expectations. Goods prices increased 0.1% mom while services index surged 0.6% mom. Food prices rose 0.1% mom and energy prices increased 2.3% mom.
Over the 12-month period, PCE price index accelerated from 2.4% yoy to 2.5% yoy, matched expectations. Core PCE price index slowed from upwardly revised 2.9% yoy to 2.8% yoy, matched expectations. Goods prices were up 0.2% yoy while services prices increased 3.8% yoy. Food prices were up 1.3% yoy while energy prices decreased -2.3% yoy.
Full US personal income and outlays release here.