Gold prices are unchanged in the Monday session. Currently, the spot price for an ounce of gold is $1303.94, up 0.04% on the day. On the release front, there are no major releases out of the US. The Empire State Manufacturing Index soared to 30.2 points, easily beating the estimate of 20.3 points. This was the indicator’s highest level since 2009.
Gold prices climbed 2.2 percent last week, as the metal closed on Friday above the symbolic $1300 level. The gold rally continued on Friday, as investors were disappointed that September CPI and Core CPI both missed their estimates. Low inflation levels continue to frustrate Fed policymakers, many who have predicted that a strong US economy and red-hot labor market will boost inflation levels. With inflation an important consideration in future rate decisions by the Federal Reserve, investors will be anxiously monitoring how Fed policymakers respond to September’s soft inflation numbers. So far, the soft inflation numbers have not affected the odds of a December rate hike, as fed futures have currently priced a December hike at 91 percent.
The crisis over Catalan independence is at a deadlock, in if the situation escalates, nervous investors could dump euros in favor of safe assets such as gold. Last week, the Spanish government set a Monday deadline for Catalan President Carles Puigdemont to expressly state whether he had declared independence, and if so, Puigemont was given three more days to retract his proclamation. However, the Catalan President shirked away from a clear answer and let the first deadline pass, calling for more dialogue with Madrid. Prime Minister Mariano Rajoy has threatened to suspend the Catalan parliament and impose direct rule from Madrid, which could trigger a violent response. The crisis has led 500 companies to start leaving Catalonia, and the Standard and Poor’s rating agency has said that the region could face a recession if the crisis continues.
