Gold prices have started the week with losses. In Monday’s North American trade, the spot price for one ounce of gold is $1230.07, down 0.34% on the day. In the U.S, there are no major releases, but the focus was on consumer numbers. Core PCE Price Index gained 0.2%, edging above the estimate of 0.1%. Personal spending edged up to 0.4%, matching the forecast. However, personal income dipped to 0.2%, its lowest level since August 2017. On Tuesday, the U.S releases CB consumer confidence.
Gold has posted four straight weekly gains, and the metal has posted strong gains of 3.2% in October. A black October for the stock markets has badly shaken investor confidence, and safe-haven gold has acted as a magnet for jittery investors. At the forefront of geopolitical tensions is the trade war between the U.S and its major partners, particularly with China. Tensions between the two largest economies show no signs of easing, and the Trump administration continues to threaten further severe tariffs on China.
Last week ended on a high note, as Advance GDP posted an impressive gain of 3.5%, above the estimate of 3.3%. Although the gain of 3.5% certainly represents a brisk pace of expansion, it was well below the sizzling Final GDP for Q2, which came in at 4.2%. The downward trend could continue as we move into the fourth quarter. On Monday, the Atlanta Fed released its well-respected GDP forecast, which predicted growth of just 2.6% in the fourth quarter. If Q4 growth does fall below the 3-percent threshold, the Federal Reserve would have to rethink its plans for three rate hikes in 2019 and that could put pressure on the U.S dollar.
