MTECHTIPS:-Gold hits session lows after upbeat U.S. consumer spending data

MTECHTIPS:-Gold hits session lows after upbeat U.S. consumer spending data

Gold prices fell to the lowest levels of the session on Thursday, after data showed that U.S. personal spending rose more than expected in May, boosting optimism over the health of the economy and supporting the case for a U.S. interest rate hike this year. The Commerce Department said that personal spending rose by 0.9% in May, the biggest gain since August 2009 and above expectations for a gain of 0.7%. Consumer spending is the single biggest source of U.S. economic growth, accounting for as much as two-thirds of economic activity. Meanwhile, the core PCE price index inched up 0.1% in May, meeting expectations and after rising 0.1% in April. The core PCE price index rose at an annualized rate of 1.2%, matching estimates and down from a 1.3% gain in April.The Federal Reserve uses core PCE as a tool to help determine whether to raise or lower interest rates, with the aim of keeping inflation at a rate of 2% or below.A separate report showed that the number of people who filed for unemployment assistance in the U.S. last week rose last week, but remained in territory consistent with a strengthening labor market. The U.S. Department of Labor said the number of individuals filing for initial jobless benefits increased by 3,000 last week to 271,000. Analysts had expected initial jobless claims to rise by 4,000 to 272,000 last week. First-time jobless claims have held below the 300,000-level for 16 consecutive weeks, which is usually associated with a firming labor market.

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