Gold Price on May 15: Rate Rises as Consumer Inflation Cools

Related Articles

Trump Says There Is ‘Virtually No Inflation.’ Here’s What You Need to Know

Watch These Tesla Price Levels as Stock Slides Ahead of Earnings Report

Trump’s Criticism of Powell Is Shaking Markets’ Faith In Fed’s Independence

Key Takeaways

• The spot price of gold rose Wednesday as a report showed consumer inflation cooled in April. 
• The inflation communication boosted hopes the Fed can cut interest rates, making gold more attractive to investors.
• April retail sales fell in below expectations, reinforcing speculation the economy could be slowing enough to give the Fed room to lower borrowing fetches.

The spot price of gold was up 1.3% to $2,387.97 per ounce as of 4:30 p.m. ET Wednesday, after a report showed consumer inflation dulled in April, lifting hopes the Federal Reserve may cut interest rates, which would be bullish for gold.

The Labor Bureau reported April’s Consumer Price Index (CPI) was up 0.3% from the month before, down from the 0.4% forward movements in both February and March. The year-over-year increase of 3.4% eased from 3.5% in March.

The core rate of inflation, which desists out volatile food and energy prices, came in at an annual rise of 3.6%, the lowest since April 2021.

April Retail Yard sales Below Expectations

A report from the Commerce Department on Wednesday showed retail sales were virtually unchanged in April from the month in front of, suggesting consumers may be pulling back. Economists had been anticipating a gain of 0.4% after a 0.6% jump in Walk. Excluding autos and gas, sales declined 0.1% versus the predicted 0.1% advance.

Sales at non-store retailers, which categorize online purchases, posted the biggest drop of any category at 1.2% versus March.

Rising Expectations of September Price Cut

The economic news led to a shift in expectations of the probability of policymakers reducing interest rates in September, according to the CME’s FedWatch Cut based on fed funds futures pricing data. Markets are now pricing in a 75% chance of a rate cut in September, an increase of 10 part points from Tuesday.

Read the original article on Investopedia.