Gold has posted gains in the Monday session. In North American trade, the spot price for one ounce of gold is $1242.52, up 0.32% on the day. In economic news, there are no major U.S releases. The Empire State Manufacturing Index dropped sharply to 10.9, down from 23.3 points in the previous release. This was well short of the estimate of 20.1 points. On Tuesday, the U.S. releases housing starts and building permits.
The U.S. released consumer November spending and inflation numbers last week. Although the numbers are down compared to October, the indicators show that the economy has lost some steam but still remains strong. Retail sales climbed in November, but the gains were muted compared to October. Core retail sales dropped from 0.7% to 0.2%, while retail sales declined to 0.2%, down from 0.8%. Still, retail sales managed to beat the estimate of 0.1%. Lower oil prices have boosted consumer spending, which is expected to look strong in the fourth quarter.
Inflation data has also softened. CPI dropped to 0.0% in November, down from 0.3% a month earlier. This marked the lowest level since May. Core CPI remained pegged at 0.2 percent. The weak readings can be attributed to falling oil prices, which has led to a sharp decline in gasoline prices. On an annualized basis, inflation gained 2.2 percent in November, down from 2.5 percent in October. With inflation still above the Federal Reserve’s target of 2 percent, policymakers have some room to scale back on rate hikes in order to adjust to softer economic conditions.
