Gold Prices Supported by Inflation Data
Core consumer inflation unexpectedly slowed on a yearly basis, while headline consumer prices held off from showing an aggressive upside surprise. The results supported bullion and Treasuries because progress in disinflation would allow FOMC members to ease monetary restrictions, lowering the opportunity cost of holding non-yielding assets. As a result, the market is pricing in bets that the Fed will cut interest rates until July, rather than September.
On Wednesday (1/15) gold rose to the level of $ 2,690 an ounce, extending the previous session's gain to the highest level in more than a month, as cooling underlying inflation in the U.S. supported bets that the Fed would tighten monetary policy less this year.
Concerns about stubborn price growth have recently been magnified by pro-inflation policies advocated by President-elect Trump, including tariffs on major trading partners and increased deficit spending. Later, some support from bullion was limited by signals of a potential interest rate hike by the BoJ next week. (yds)
Source: newsmaker
