FX.co ★ Gold Dips Ahead of US PCE Data

Gold prices dipped below $4,200 per ounce on Friday as investors turned their attention to key U.S. economic data ahead of the Federal Open Market Committee (FOMC) meeting set for next week. The focus is on the delayed September Personal Consumption Expenditures (PCE) report, considered the Federal Reserve’s favored inflation indicator, which is expected to provide insights into the potential timing and trajectory of monetary policy relaxation. Concurrently, the ADP reported an unexpected reduction of 32,000 in private sector jobs, while Challenger reported 71,000 job cuts in November, pushing the total for the year to nearly 1.17 million. These indicators suggest a softening labor market. As a result, expectations have solidified for a Fed interest rate cut, with markets estimating an approximately 87% chance. Moreover, speculation about a potential shift towards more aggressive monetary easing has been fueled by reports that White House economic adviser Kevin Hassett may replace Fed Chair Powell in May. Over the course of the week, gold is poised for a slight decline.