According to a comprehensive report from Worldway: International spot gold prices fell and then rose on Thursday, once approaching the previous trading day's low of 1316.00 USD/ounce. Before the New York market opened, a large bullish candle emerged, protecting the bottom of the high-level consolidation range since June 19, with prices consolidating in a narrow range around 1315 USD/ounce. U.S. COMEX-8 month gold futures closed down 5.6 USD, at 1317 USD per ounce.
The Federal Reserve's core inflation indicator—the core PCE price index hit a 15-month high of 1.5%, while the annual rate of the PCE price index grew by 1.8%, the highest level since October 2012, further approaching the 2% inflation target set by the Fed. Last week, Fed Chair Yellen called the 2.1% CPI in May "noise," triggering market speculation on U.S. inflation. The May PCE data continued the upward trend seen since March, providing the latest evidence of upside risks to U.S. inflation.
Meanwhile, the number of initial jobless claims released last week was 312,000, slightly higher than expected, but the 4-week moving average remained at a post-crisis low, indicating good recovery momentum in the labor market. However, personal income and spending in May only rose moderately, increasing by 0.4% and 0.2% respectively, which does not support market expectations for an accelerated U.S. economic recovery in the second quarter. In other words, the second-quarter economy may not be as strong as previously expected, and current economic performance can only be described as moderate.
Regarding geopolitics, pro-Russian separatists in eastern Ukraine have agreed to hold a new round of peace talks today (June 27), easing the situation somewhat. The Iraqi presidential office issued a decree on Thursday announcing that a meeting will be held on July 1 to initiate the process of forming a new government to address the "existential threat."
The moderate recovery of the U.S. economy is currently unlikely to pose a threat of an early interest rate hike by the Fed, but the short-term easing of the situation in Iraq has also dampened the upward momentum of gold prices. There is a lack of data from the U.S. today, and the situation of gold prices fluctuating at high levels may continue until more clues are revealed by the U.S. non-farm payroll data next week.
