Gold prices are holding some gains as consumer inflation pressures were weaker than expected last month
Thursday, the U.S. Labor Department said its U.S. Consumer Price Index was unchanged in October, after a 0.2% rise in September. The data were weaker than consensus forecasts, calling for a rise of 0.1%
The report said that annual inflation data rose 1.2%, missing expectations calling for a 1.3% rise.
Stripping out volatile food and energy prices, core inflation also did not rise last month, following September’s rise of 0.2%. Economists were expecting to see a 0.2% rise.
For the year, inflation is up 1.6%; economists were expecting to see a 1.7% rise.
December gold futures are seeing little reaction to the inflation data. Price last traded at $1,870.10 an ounce, up 0.46% on the day.
While at first blush the weak inflation data is disappointing for gold, which is seen as a traditional hedge against rising price pressures. However, some economists and analysts note that the latest data gives the Federal Reserve room to active more aggressively, which would be expected to eventually drive inflation higher.
However, Adam Button, chief current strategist at Forexlive.com said that…
Continue reading at KITCO.com