12/14/2022–|Last Updated: 12/14/202203:36 (Mecca)
Economic data showed a drop in the US inflation rate on Tuesday as consumer prices posted the lowest monthly rise in more than a year last November, indicating a chance of weathering the worst part of the crisis of US inflation, which has driven up oil and gold prices.
The Bloomberg news agency quoted a statement from the US Department of Labor saying that the core inflation rate, which excludes more volatile food and energy prices, was 0.2% a month, compared with the 0.3% in October, and 6% annually, compared to 6.3% in the previous month.
The consumer price inflation rate last November was 0.1%, compared with 0.4% monthly the previous month, and the annual inflation rate reached 7.1%, compared with 7.7% of the same period, thanks to the fall in energy prices in exchange for the increase in food prices.
Analysts had expected inflation to ease to 7.3% in November.
The report from the Ministry of Labor – which is the last one this year – indicates that the inflation rate has started to fall, although it remains very high.
The energy index rose by 13.1% on an annual basis in the last month, while the food index rose by 10.6%, lower increases than those recorded last October.
Consumer prices in the United States reached an almost 41-year high last June, registering 9.1%.
Over the course of the current year, the US Federal Reserve has implemented 6 interest rate hikes, the last 4 of which were by 75 basis points, while it expected an interest rate hike of 50 basis points in a statement released Wednesday.
The dollar is falling
As a result, the dollar index fell more than 1% to its lowest level in about 6 months, which reinforces expectations that the Federal Reserve (the central bank of the United States) will reduce the pace of rate hikes interest rate Wednesday and the standard 10-year US Treasury yields also fell.
The Federal Reserve is expected to issue a policy statement on Wednesday, followed by a press conference by bank president Jerome Powell. The Bank of England and the European Central Bank are also due to meet this week, and each are expected to raise interest rates by 50 basis points .
Oil is going up
Oil prices soared to over $80 a barrel on Tuesday as investors bought risky commodities after the release of US inflation data.
The market was also buoyed by concerns about supply disruptions, including the continued closure of the main ‘Keystone’ pipeline carrying crude from Canada to the US following a major spill.
Brent crude futures were up 3.4% to $80.84 a barrel by 16:41 GMT, and US West Texas Intermediate crude futures were up 3.4% to $75.66.
Gold jumps
Gold prices also rose about 2% on Tuesday, to their highest levels in more than 5 months, after data showed a smaller-than-expected rise in US consumer prices.
Spot gold was up 2.1% to $1,817.64 an ounce by 14:36 GMT, its highest level since June 30.
US gold futures rose 2.2% to $1,830.90.
Among other precious metals, silver was up 2.5% in spot transactions to $23.87 an ounce, platinum was up 4.1% to $1042.25, while palladium was up by 4.3% to $1969.25.
