Consumer spending in the United States increased more than expected last month amid higher purchases of motor vehicles and higher inflation, official data revealed on Monday. According to the US Department of Commerce, consumer spending jumped 0.5% in September, following the preceding month's downwardly revised fall of 0.1% and meeting analysts' expectations. When adjusting for inflation, Monday's report showed consumer spending advanced 0.3% in the reported month after dropping 0.2% in August. In the meantime, the PCE Price Index grew 0.2% in September, the same pace as in the previous month. Year-over-year, the Index climbed 1.2%, the largest annual gain since November 2014, up from August's gain of 1.0%. Furthermore, the so-called core PCE Index increased 0.1% in the same month, compared to the 0.2% rise registered in August. On an annual basis, the core PCE Index advanced 1.7%, the similar increase in the preceding month. Officials from the US Federal Reserve meet for two days this week, starting Tuesday, to discuss. The Fed is not expected to raise interest rates at that meeting ahead of the presidential election; however, analysts widely anticipate a rate hike in December. Back in September, the Fed held rates steady for the sixth straight meeting.
The US economy expanded at its fastest pace since 2014 in the Q3 of 2016 amid higher exports and a rise in inventory investment, official data revealed on Friday. According to the US Department of Commerce, the economy grew 2.9% in the Q3, following the preceding quarter's 1.4% growth and surpassing the 2.5% pick up market forecast. It was the strongest expansion since the Q3 of 2014. However, the stronger than expected figures are unlikely to influence the Federal Reserve's views, as it is more focused on employment and inflation. US exports jumped 10% in the Q3, the largest increase since the Q4 of 2013, contributing 0.83% to GDP growth. The Q3 rise in exports was led by soybeans and analysts suggest that the momentum could be lost in the Q4. Inventory accumulation by businesses increased $12.6 billion in the reported quarter, contributing 0.61% to GDP growth. Investment in nonresidential structures advanced 5.4% in the Q3, the biggest gain since the Q2 of 2014, compared to the prior quarter's 2.1% drop. Meanwhile, business spending on equipment declined 2.7%, falling for the fourth consecutive month. Separately, the Labor Department said the Employment Cost Index remained unchanged at 0.6% in the Q3, in line with analysts' expectations
Upcoming fundamentals: US ISM Manufacturing PMI
There are a lot of data releases set to affect the markets during Tuesday's trading session. However, there is almost nothing that could increase the volatility of the yellow metal, as only the US ISM Manufacturing PMI is worth mentioning. The index is set to be released at 14:00 GMT.
Gold breaks resistance and surges
Daily chart: The yellow metal surged on Tuesday morning, as it jumped from 1,276.34 to 1,279.83 and passed the monthly pivot point at 1,279.01. As the resistance of the pivot point has been broken, the way is free up to the level of 1,285.54, where the first weekly resistance is located. However, the outlook is just like it was yesterday with the exception of the newly calculated monthly PP, which did not provide sufficient resistance to even hinder the surge of the bullion. Gold is most likely to continue the surge during the day.Trader sentiment unchanged
Spreads (avg,pip) / Trading volume / Volatility
Market participants foresee the price of gold below 1,300 by February
Traders who were asked regarding their longer-term views on gold between October 1 and November 1 expect, on average, to see the metal below 1,300 in February. Generally, 48% (+1%) of participants believe the price will be above 1,300 in ninety days. Alongside, 36% (-4%) of those surveyed reckon the price will trade in the range between 1,150 and 1,300 over the next three months.