Gold Price Sinks to Test $2000 on Strong US Inflation Data
Tuesday, 2/13/2024 14:29
The
PRICE of GOLD sank against a surging Dollar on Tuesday, dropping to test the $2000 level but holding firmer against non-US currencies as new data said inflation isn't slowing as expected in the world's largest economy.
The
gold price sank $25 inside 20 minutes of today's US Consumer Price Index release, hitting a 4-week low of $2002 per Troy ounce.
The US cost of living rose 3.1% in January from 12 months before, the Bureau of Labor Statistics said, beating forecasts of a 0.5-point slowdown from December's figure to 2.9%.
Excluding fuel and food, inflation on the so-called 'core' CPI measure held unchanged at 3.9%.
Betting on a March rate cut from the Federal Reserve evaporated on the news, dropping to barely 1-in-20 positions in CME futures contracts after peaking above 9-in-10 at the turn of the year.
Longer-term interest rates meantime jumped as bond prices sank with gold, taking the yield offered by 10-year US Treasury debt up to 4.27% per annum, the highest since the start of December.
Gold prices also fell for non-Dollar investors but less steeply, hitting 2-week low in Euros and the British Pound.
Having predicted in December that they will cut rates 3 times in 2024, Fed officials have since stressed the need for "patience" before reducing the cost of borrowing from today's 2-decade high.
Fed governor Michelle Bowman
said yesterday she doesn't believe rates cuts would be "appropriate...in the immediate future", preferring to keep downward pressure on inflation.
Other Fed officials have meantime begun saying they want to see
disinflation in housing and rental costs on top of goods and services.
Silver prices also fell but unlike gold it hit only a 1-week Dollar low at $22.39 per Troy ounce.
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