(Kitco News) - The gold market remains in a difficult position as it continues to test resistance near $4,700 an ounce. At the same time, rising inflation appears to be becoming embedded in the broader economy, which could force the Federal Reserve to take a more hawkish stance on monetary policy.
The Consumer Price Index (CPI) rose 0.6% in April, following a 0.9% increase in March, the U.S. Bureau of Labor Statistics announced Tuesday. The inflation data were in line with economists’ expectations.
Over the past 12 months, headline inflation climbed 3.8%, sharply higher than the previous month’s reading of 3.3%. Annual inflation also came in hotter than expected, as economists forecasted a 3.7% increase.
Meanwhile, core CPI, which strips out volatile food and energy prices, rose 0.4% last month, up from 0.2% in March. Core inflation also exceeded expectations, as consensus forecasts had called for a 0.3% increase.
Over the past 12 months, annual core inflation rose 2.8%, up from 2.6% reported in March.
Although the inflation data created a headwind for gold, the precious metal continued to test a key near-term resistance level in its initial reaction to the latest economic data. Spot gold last traded at $4,703.20 an ounce, down 0.66% on the day.
