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    Mixed Trading for Gold, Silver After Key Report Shows Inflation Cooled in May

    Gold and silver were mixed in trading Friday morning as a key economic gauge for the Federal Reserve showed inflation cooled last month, renewing market hopes that policymakers will finally be convinced to lower interest rates later this year. 

    Data from the U.S. Bureau of Economic Analysis reported that personal consumption expenditures, or PCE, were unchanged last month, while the headline inflation rate fell to 2.6%. Both figures were in line with Wall Street estimates. 

    More significantly, the core PCE index – which excludes food and energy because of their often-erratic price swings that make it difficult to get an accurate spending snapshot – rose 0.1% in May. Core inflation cooled to 2.6% year over year, representing a decrease from April’s year-over-year figure of 2.8%.  The final estimates for core PCE – the Federal Reserve’s preferred method of measuring inflation – were also in line with investor projections. 

    After spending the morning in positive territory, gold began to dip and was down $1.30 at $2,326 an ounce. Meanwhile, the yellow metal’s cousin was still in the black – silver was up $0.24 at $29.25 per ounce. 

    Federal officials say they are looking for consistent economic data showing a move toward their 2% inflation target before considering a pivot to adjust interest rates, which are at a 23-year high. 

    Friday’s data was greeted with market optimism that a cut could come sooner than later this year. After the May PCE report was released, the CME FedWatch Tool showed odds near 68% that the first trim would come during the Fed’s Sept. 18 policy meeting.

    Friday’s data from the BEA also showed that personal income last month increased $114.1 billion, or 0.5%, while disposable personal income (DPI) increased $94 billion, also at a 0.5% monthly rate.

    Disclaimer: All Market Updates are provided as a third party analysis and do not necessarily reflect the explicit views of JM Bullion Inc. and should not be construed as financial advice.

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