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(Kitco News) – Gold prices are trying to reject their session low after a stronger than expected price in US consumer prices.
On Thursday, the U.S. Department of Labor said its U.S. consumer price index rose 0.6% in May after rising 0.8% in April. The data beat consensus forecasts as economists predicted a 0.4% increase.
For the year, the report said that headline inflation rose 5.0%. “This was the
largest 12-month increase since a 5.4 percent increase in the period ending August 2008. ”
Meanwhile, core CPI, which eliminates food and energy costs, rose 0.7% in May, compared with a 0.9% increase in April. Economists expected to see an increase of 0.5%.
For the year, the core CPI has risen by 3.8%, the largest 1
The gold market seems to be catching a smaller bid despite following the strong headline number. Gold futures in August last traded at $ 1,885.50 an ounce, down nearly 50% on the day. On the way into the report, gold prices fell by approx. 1%.
Some market analysts have said the stronger inflation data is negative for gold because it could force the Federal Reserve to tighten its ultra-loose monetary policy and reduce their monthly bond buying program faster than expected.
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