With the value of the U.S. dollar coming under pressure following consumer price inflation data, the price of gold moved to the upside during trading on Wednesday.
Gold for February delivery climbed $8.80 or 0.5 percent to $1,827.30 an ounce after jumping $19.70 or 1.1 percent to $1,818.50 in the previous session.
The increase in the price of gold comes as the U.S. dollar index has slid by 0.7 percent after a highly anticipated Labor Department report showed the annual rate of consumer price growth once again reached the highest level in almost 40 years.
The report showed the annual rate of consumer price growth accelerated to 7.0 percent in December from 6.8 percent in November, showing the biggest yearly jump since June of 1982.
Core consumer prices, which exclude food and energy prices, were up by 5.5 percent year-over-year in December compared to the 4.9 percent spike in November. The annual growth reflected the biggest surge since February of 1991.
The continued acceleration in the annual rate of consumer price growth came as prices increased by slightly more than expected on a monthly basis, although the pace of growth slowed from November.
The Labor Department said its consumer price index rose by 0.5 percent in December following a 0.8 percent advance in November. Economists had expected consumer prices to rise by 0.4 percent.
Core consumer prices increased by 0.6 percent in December after climbing by 0.5 percent in November. Core prices were expected to advance by 0.5 percent.
The monthly consumer price growth primarily reflected higher prices for shelter and used cars and trucks along with an increase in food prices.
On the other hand, the report said energy prices fell by 0.4 percent in December amid decreases in prices for gasoline and natural gas.
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