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2024-11-01
Interesting about finance
Gold price drops 1.7% amid inflationary pressures

Gold price drops 1.7% amid inflationary pressures

Gold prices experienced a sharp decline on the last day of October, dropping over 1.7%, marking the steepest daily fall since August.

This downturn followed a strong rally where gold neared record highs of $2,780 per ounce.

Several key factors influenced this movement

Firstly, the latest core Personal Consumption Expenditures (PCE) index, favored by the Federal Reserve as an inflation gauge, showed resilience, rising to 0.3% in September from the previous 0.2%. On an annual basis, the figure remained at 2.7%, indicating that inflation is not cooling as much as markets anticipated. This reinforces perceptions of a robust U.S. economy, driven by continued growth in consumer spending.

Persistent inflation and economic stability complicate the Federal Reserve’s ability to justify aggressive rate cuts. Consequently, the expectation of prolonged high interest rates pressures non-yielding assets like gold.

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