(Kitco News) – Gold prices are trading at the top of their last trading area, but still struggling to find momentum, even though consumption inflation is in weaker than expected.
Friday, the US Department of Labor said its US consumer price index rose by 0.3% in April, following a 0.4% increase in March. The data was weaker than expected with consensus forecasts requiring an increase of 0.4%. For the year, inflationary pressures increased 2%.
Stripping out volatile food and energy prices increased core inflation somewhat less than expected and increased by 0.1% in April. Economists expected to see an increase of 0.2%. The core inflation pressure for the year remains silent, rising 2.1
Gold prices have bounced slightly higher in the first reaction to the disappointing inflation data, but have not been able to break initial resistance of $ 1,290 per ounce. June gold futures last traded at $ 1,288.10 an ounce up 0.23% on the day.
Some commodity analysts have noted that the gold price will work well in a low inflation environment because it will keep the Federal Reserve from raising interest rates aggressively.
Petrol prices continued to be an important factor in inflation figures. The report said the gasoline index rose by 5.7% last year, "accounting for over two-thirds of seasonally adjusted all-lasting monthly increases."
Overall, the energy index increased 2.9% last month. When looking at food prices, the report said food costs fell in April for the first decline since June 2017.
Avery Shenfeld, senior economist at CIBC Capital Markets, said that the lack of inflation could get comments from some of the stupid members of the Federal Reserve ; But he added that the data is not unlikely to shift the current neutral monetary policy stance.
"In our opinion, the majority of the Fed will still be satisfied with a stand-up, focusing on growth and labor density as reasons for expecting inflation to rise again," he said. Expectations. "
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