FX.co ★ Gold Pares Gains

Gold prices closed at approximately $4,210 per ounce on Friday, maintaining proximity to the peak levels reached since late October, following a retraction from an earlier upswing. This adjustment came as recent US economic data supported the anticipation of an imminent interest rate cut by the Federal Reserve. The uptick in September's Personal Consumption Expenditures (PCE) measured a 0.3% increase month-over-month and a 2.8% rise year-over-year. Meanwhile, the core PCE slightly decreased to 2.8% from the previous 2.9%, indicating a balance between persistent goods prices and a slowdown in service inflation, signaling a reduction in underlying inflation pressure. Additionally, the initial results from the Michigan consumer sentiment survey showed a slight improvement to 53.3 points, with one-year inflation expectations declining to 4.1% and the five-year outlook easing to 3.2%. This data suggests a decrease in immediate inflationary pressures. Coupled with an unexpected reduction of 32,000 in private payrolls reported by ADP, and Challenger's announcement of 71,321 layoffs, market predictions have adjusted to reflect an approximately 87% likelihood of a 25-basis-point rate cut. These developments prompted strategic repositioning, contributing to the uplift in gold prices.