MTECHTIPS:-Gold inches down extending slump amid strong U.S. data, Greek impasse
Gold futures inched down on Thursday extending a recent slump, amid strong U.S. consumption data and a lack of progress in Greek Debt negotiations. On the Comex division of the New York Mercantile Exchange, gold for August delivery fell 0.02% to 1,172.70 a troy ounce. The precious metal closed lower for the sixth consecutive session, continuing its trend downward since plunging more than 1.2% on Monday. Gold futures traded in a tight range on the session between 1,171.10 and 1,177.30. On Thursday morning, the U.S. Department of Commerce said consumer spending surged in May by 0.9%, the highest monthly gain in nearly six years and above expectations for a 0.7% rise. Bolstered by a 0.5% spike in personal income, the surge reflects an increase in consumer spending in auto purchases and retail goods. Consumer spending accounts for approximately two-thirds of economic activity throughout the U.S. At the same time, the Commerce Department said its PCE price index rose by 0.3% for the month in line with consensus estimates from analysts. The index is up by 0.2% on a year-over-year basis. The Core PCE price index, which strips out volatile food and energy prices, inched up 0.1% from April. Over the last 12 months, however, the index is up 1.2%. The PCE index is the Federal Reserve’s preferred measure for inflation. Last week, the Fed reiterated that it would like to see inflation move toward its long-term targeted goal of 2% before it institutes its first interest rate hike in more than a decade. Gold, which is not attached to interest rates or dividends, struggles to compete with high-yield bearing assets in higher rate environments. Elsewhere, initial jobless claims remained near historic lows even as the level increased by 3,000 last week to 271,000. More critically, the four-week average fell by 3,250 to 273,750 moving lower from monthly averages throughout the spring.