Gold Rises Above $4,400 After U.S. CPI Release
Gold prices strengthened following the release of the latest U.S. inflation data on Wednesday. After the CPI report, bullion traded around $4,424 an ounce, maintaining its position above the key psychological level of $4,400.
Data from the Bureau of Labor Statistics showed that U.S. CPI rose 0.1% month-on-month and 3.4% year-on-year in July. The figures were in line with market expectations, while annual inflation eased from 3.5% in June. Core CPI increased 0.2% on the month and slowed to 2.5% annually from 2.6%.
The breakdown of the report also showed that price pressures did not accelerate significantly. Shelter costs rose only modestly, while energy prices declined during the month, helping to keep overall inflation under control.
The initial market reaction was relatively positive for gold because the data did not deliver a hotter-than-expected inflation surprise. This reduced concerns that the Federal Reserve would need to accelerate interest-rate hikes in the near term.
For gold, the easing in annual Core CPI provided additional support, especially after recent U.S. labor data showed signs of weakening. The combination of softer labor conditions and more contained underlying inflation strengthens the case for a less aggressive Fed policy stance.(mrv)
Source : Newsmaker.id
