Gold Prices Unchanged Following In-line U.S. Inflation Data

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Dec 11, 2019 12:12 NY TimeKitco 10AM Silver Fix

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(Kitco News, Wed.Dec.11th, 2019) –Gold prices are holding steady in positive territory as the latest inflation data holds no surprises for markets.

Tuesday, the U.S. Labor Department said its U.S. Consumer Price Index rose 0.3% in November, after a 0.4% rise in October. The data was slightly better than expected as consensus forecasts called for a 0.2% rise. For the year, inflation rose 2.1%, up from the previous reading of 1.8%, the report said.

The report noted that rising energy prices contributed to the higher inflation pressures. The gasoline index rose 1.1% last month. 

Stripping out volatile food and energy prices, core inflation rose by 0.2%, which was in line with expectations. For the year, core inflation is up 2.3%, the report said.

The gold market as seen little movement in initial reaction to the data. February gold futures last traded at $1,470.50 an ounce, up 0.16% on the day.

According to some economists, gold prices are holding on to modest gains as the inflation data does nothing to shift the Federal Reserve’s stance to leave interest rates at their current low levels.

The U.S. central bank will release its latest monetary policy decision later this afternoon. The CME FedWatch Tool shows that markets are not expecting to see any move in interest rates.

Royce Mendes, senior economist at CIBC noted that headline inflation data rose at its fastest pace since in a year; however, he added that it still shouldn’t have much impact on interest rate expectations.

“US inflation came in a touch hotter than expected, but it shouldn’t do much to move markets today,” he said.

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Jack Dempsey, President

jdemp2003@gmail.com