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XAUUSD : Continue to Decline

Gold continued its downward rally after the February U.S. personal income and spending data came out.

 According to the data the personal income rose .3% in February in line with the economist’s expectation and spending also increased by .3% in line with the economist’s expectation. The price index of core personal consumption expenditures rose .1% in February which was also in line with the economist’s expectation. The YOY reading of PCE which is the annual inflation rate remained unchanged from January at 1.1%. It is the core inflation measure which Fed focuses on or targets at 2%. Although the inflation rate is well below the target, the tone of the report was encouraging and we expect economy to grow meaningfully in the coming months.

On the daily chart, the pair broke the key support level at 1294.47 and continued its decline.The next support level the pair may find is at 1278.47.