Gold Prices Spiked Amid Improved Economic Indicators

On Friday, gold prices increased after cooling inflation heightened expectations of slower rate hikes from the Federal Reserves.

The US gold futures for February delivery soared by 0.11% to $1,900.85 per ounce in the Asian afternoon session.

In December, the Consumer Price Index slumped by -0.10% month-on-month, slightly below the analyst’s expectation of 0.00%. The recent report declined from the previous month’s 0.10% data.

On the other hand, the annual figure sagged by 6.50%, in line with the analysts’ expectations. The latest statistics were below the previous 7.10% in November. Also, analysts hoped for an easing inflation trend following the buyer prices shrinking for the first time in 2-1/2 years.

Meanwhile, economists stated that the bullion jumped as CPI rose but continued to improve despite the cooling consumer cost. In addition, the market is affected by the lower US dollar and smaller interest rate hikes.

Furthermore, gold is seen as an investment in case the value of currency plunges. Yet, its value soared as the rate tweaked following the Fed decision.

On Thursday, the Federal Reserve of Philadelphia leader Patrick Harker expressed the need to raise interest rates to fight inflation. Also, Atlanta leader Raphael Bostic stated the data might allow the central bank to lower the rate hike by a quarter-point.

Inflation Rate Tumbled while Gold Prices Improved

Besides, the CPI fell as the energy cost rose by 7.30%, slightly below 13.10% in November. Likewise, the gasoline price plummeted by 1.50% following the previous 10.10% data. Also, fuel oil declined by 41.50% from the prior month’s 65.70% record.

Moreover, food expenses also exhibited a steady slowdown by 10.40% compared to the previous 10.60% result. Further, the used cars and trucks rate continued to drop by -8.80% from the prior -3.3% figure.

On the other hand, the shelter value improved by 7.50% from the preceding 7.10% outcome. Also, the inflation rate peaked at 9.10% in June 2022 and stayed above the Fed’s 2.00% target.