(Kitco News) -The gold market continues to consolidate above $2,000 an ounce, but could struggle to make further gains as U.S. inflation remains stubbornly elevated.
Thursday, the Bureau of Labor Statistics said that its Consumer Price Index rose 0.3% in December, following November’s 0.1% increase. The data was hotter than expected with consensus forecasts calling for a 0.2% increase.
At the same time headline inflation in the last 12 month rose more than expected, increasing 3.4% as of last month. According to consensus estimates, economists were looking for an annual increase of 3.2%.
The report also shows that higher consumer prices remains embedded in the broader economy as core CPI, which strips out volatile food and energy prices rose 0.3%, following November’s 0.3% increase. The data rose in line with expectations.
Core inflation is proving to be fairly stubborn rising 3.9% in the last 12 month, hotter than economists were expecting.
Although the latest inflation data is supporting the U.S. dollar, it is not having a major impact on gold prices, in initial reaction. Spot gold last traded at $2,029.60 an ounce, up 0.27% on the day.
