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Gold prices hold steady on Monday amid weaker dollar lower Treasury yields

Market remains steady due to cautious investor sentiment and thin activity.

Market Overview

The start of the week saw a relatively calm market, with spot prices remaining mostly steady. This stability was largely driven by the cautious investor sentiment that followed Friday’s gains. The market’s thin activity, which was largely influenced by the weaker dollar and lower Treasury yields, contributed to the lack of significant price movements.

Key Factors Influencing Market Activity

  • Weaker dollar: The decline in the dollar’s value against other major currencies led to a decrease in the cost of imports and a decrease in the value of the dollar-denominated assets.

    Inflation eases in the US economy.

    The Context of the PCE Index

    The PCE index is a widely used measure of inflation in the United States, accounting for about 80% of the country’s personal consumption expenditures. It is calculated by the Bureau of Labor Statistics (BLS) and is considered a more comprehensive measure of inflation than the Consumer Price Index (CPI). The PCE index takes into account the prices of goods and services consumed by households, including housing, food, transportation, and healthcare. Key components of the PCE index include: + Housing: 43.8% of the index + Transportation: 14.3% + Food: 13.4% + Healthcare: 8.3% + Other goods and services: 20.2%

    The November Data

    The 0.1 percent increase in the PCE index in November was a welcome relief for the U.S. economy, which had been experiencing elevated inflationary pressures in recent months. The revised 0.2 percent increase in October was also a significant drop from the 0.4 percent increase in September.

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