Consumer spending in the United Sates advanced more than expected last month as households boosted purchases of motor vehicles and services amid increasing wages. On Monday, the Commerce Department reported consumer spending rose 0.5% in December, following the preceding month's 0.2% rise and surpassing a 0.4% increase forecast. The stronger than expected figure pointed to solid domestic demand that is expected to boost economic growth in early 2017. Data showed purchases of manufactured durable goods climbed 1.4% last month, while consumer spending on services jumped 0.4%. Meanwhile, personal income increased 0.3% month-over-month in December after rising 0.1% in the prior month. However, economists expected household income to climb 0.4%. Salaries and wages grew 0.4% in December after dropping 0.1% in November. For all of 2016, income climbed 3.5% after increasing 4.4% in 2015.
Separately, the Commerce Department said the PCE Price Index advanced 0.2% in December, following November's 0.1% increase. During the twelve-month period ending December, the Index rose 1.6%, the largest increase since September 2014, up from the previous month's 1.4% rise. Excluding volatile items, the Core PCE Index grew 0.1% after being unchanged in November, in line with analysts' expectations.
Upcoming events: US data and FOMC
Wednesday is set to be a busy day for fundamentals in the US, as various data releases are scheduled for today. At 13:15 GMT the US ADP Non-Farm Employment Change is set to be published. Afterwards, at 15:00 GMT US ISM Manufacturing PMI will be out. Last but most important data will come at 19:00 GMT. At that time the FOMC Statement and Federal Funds Rate will be released to the public.
Gold retreats on Wednesday
Daily chart: After reaching the 1,215 mark during Tuesday's trading session, the yellow metal began a retreat, which continued to last into Wednesday's trading. From a technical perspective, the yellow metal has no support until the level of 1,196.86 on the daily chart. Due to that and the fact that it previously attempted to break through the weekly R1 at 1,213.16 more than once before the retreat, it can be assumed that the bullion is set to lose value by the end of the day, in the process retreating to the weekly PP.SWFX traders become slightly bullish
Spreads (avg,pip) / Trading volume / Volatility
Market participants foresee the price of Gold being around 1,250 in May
Traders who were asked regarding their longer-term views on gold between January 1 and February 1 expect, on average, to see the metal near 1,250 in early April. Generally, 45% of participants believe the price will be above 1,250 in ninety days. Alongside, 37% of those surveyed reckon the currencies will trade in the range between 1,000 and 1,200 over the next three months.