(Kitco News) - The gold market is posting gains after U.S. inflation pressures cooled more than expected last month.
The headline Consumer Price Index (CPI) rose by 2.7% over the last 12 months, lower than economists’ forecasts for a 3.1% reading.
Annual Core CPI, which strips out volatile food and energy prices, increased by 2.6% in the last 12 months, lower than the 3.0% expectation.
The report did not contain month-over-month figures or monthly priors as October’s CPI data was not released due to the U.S. government shutdown.
The gold market shot higher on the session following the latest inflation data. Spot gold last traded at $4,332.10 per ounce, down 0.13% on the day.
"It always sounds smarter to predict trouble ahead, but this morning’s inflation data was much better than expected," said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management. "Of course, it’s only one month’s data points and they will likely fluctuate in the upcoming months, but the main concern of Fed officials who are reluctant to keep cutting is that inflation is persistently high and won’t come down if they keep lowering interest rates, and at this point that doesn’t look like it’s the case."
"While next year will undoubtedly bring new challenges, heading into the end of the year there should be room for the market to move higher as corporate profits are increasing, the GDP is growing and inflation (for now) remains in check," he added.
Jamie Cox, Managing Partner for Harris Financial Group, told Kitco News that there is no longer a case for restrictive monetary policy.
"The inflation bump from tariffs is behind us, so the path is now clear for the Fed to lower rates again in January," he said.
