Gold Remains Softer After U.S. CPI Rises 0.2% During May
Editor's Note: Updating earlier story with more details from report.
(Kitco News)- Gold prices were unfazed, remaining modestlysofter after a Labor Department report Tuesday showing that U.S. consumerprices rose by a seasonally adjusted 0.2% in May.
The core index for CPI, excluding thevolatile food and energy sectors, was also up 0.2%.
Going into the report, consensusexpectations compiled by news organizations had been for a rise 0.2% in both theheadline figure and the core rate.
As of 8:31 a.m. EST, Comex August gold was last down $4 to $1,299.10 an ounce. The metal had been at $1,297.50 one minute aheadof the CPI report.
The Labor Department blamed the CPI increaselargely on higher energy costs. The index for gasoline prices climbed 1.7%,more than offsetting declines in some of the other energy component indexes andled to a 0.9% rise in the energy index. The medical-care index rose 0.2%, thefood index was unchanged and the shelter index was up 0.3%.
“Compared to the softer print seen inApril, May's somewhat stronger core gain was aided by medical care commoditiesand new car prices,” said Andrew Grantham of CIBC Economics.
“However, airline fares continued to decline (minus1.9% on the month and minus 6.6% year-over-year) to weigh slightly on the corefigure. Overall these figures are in line with expectations and as suchshouldn't move markets much today or change the debate for policymakers aheadof the FOMC [Federal Open Market Committee] meeting tomorrow.”
On a12-month basis, the overall index rose 2.8%, continuing its upward trend sincethe beginning of the year, the government said. The core index for all itemsless food and energy rose 2.2% for the 12 months ending May. The food indexincreased 1.2%, and the energy index rose 11.7%.
By Allen SykoraFor Kitco News
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