The gold market has dropped like a stone into negative territory after the US inflation pressure rose more than expected.
Tuesday, the U.S. Labour Department said its much-anticipated Consumer Price Index rose 0.1% in August after an unchanged reading in July. Economists were looking for a drop of 0.1%. The report said that annual inflation rose 8.3% last month. Economists were expecting to see a rise of 8.1%.
Core CPI, which strips out volatile food and energy prices, rose sharply by 0.6% last month. According to consensus estimates, economists were looking for a 0.3% rise. For the year, core inflation is up 6.3%.
The gold market has seen a significant reaction to the latest inflation numbers, giving up all its overnight gains. December gold futures last traded at $1,723.90 an ounce, down nearly 1% on the day. At the time of writing gold trades at $1705.30 per ounce, with hardly any momentum to rebound.
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