Gold prices lose some ground as inflation pressures ease

New York (Apr 30)  Gold prices are off their highs but still holding on to gains as inflation pressures eased in line with expectations last month.
Thursday, the Department of Commerce said that its Core Personal Consumption Expenditures Index, dropped 0.1% in March, in line with expectations. For the year core inflation showed a reading of 1.7%, down from the previous reading of 1.8%.

Along with weak inflation the report noted a sharp drop in consumer spending as incomes dropped more than expected.

According to the report, personal spending dropped 7.5% last month. Economists were expecting to see a decline of 4.8%. Meanwhile, income dropped 2%; consensus forecasts were expecting a 1.6% decline.

The economic data is appears to be having little impact on gold prices, which have fallen from their overnight highs. June gold futures last traded at $1,722.10 an ounce, up 0.51% on the day.

Some economists are not surprised that personal consumption and income data were weaker than expected as consumers are forced to stay at home after state governments shut down all non-essential businesses.

By 09:01am EST spot gold was down $6 to $1707, while spot silver slid almost 1% to $15.16. However, spot palladium was up $84 to $2041.

KitcoNews