© Reuters.
By Barani Krishnan
Investing.com – Gold broke above $1,900 an ounce for the first time in eight months after US consumer price growth slowed as expected in December. This supports the Federal Reserve’s goal of slowing interest rate hikes to curb inflation.
Gold for New York’s Comex was at $1,904.35 an ounce by 8:55 AM ET (13:55 GMT), up $25.45, or 1.3%.
Benchmark U.S. gold futures have gained more than 4% since the start of the year, up nearly 4% in December and 7% from November. Thursday’s session high touched $1,905 for gold in February, its highest since February. since May when it reached its peak at 1910.20
At $1,900.54 — up $24.96, or 1.3%, gold’s intraday high was $1,901.69, its highest level since May.
Data from the US rose 6.5% in the 12 months through December. The Labor Department said Thursday. It announced the slowest inflation growth in more than a year. And it indicates less interest rate hikes by the Federal Reserve. Earlier rapid interest rate hikes to relieve pressure on prices
The Consumer Price Index for all urban consumers, known as CPI for short, slowed in line with economists’ expectations. After reporting annual growth of 7.1% in November.
“This is the smallest increase in 12 months since the end of October 2021,” the Labor Department said in a news release.
The CPI hit a 40-year high in June. It grew at a rate of 9.1% per year, compared to the Fed’s inflation target of just 2% per year. The central bank has raised rates 425 basis points since March through seven rate hikes. Prior to that, the rate peaked at just 25 basis points as the central bank lowered interest rates to near-zero after the COVID-19 pandemic. Globally in 2020, the Fed, which has carried out four consecutive interest rate jumps of 75 basis points from June to November, began to slow down in December
For its next interest rate decision on Feb. 1, economists expect the central bank to announce a 25 basis point hike.
