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U.S. consumer prices fell for the first time in six years in June, and a key measure of underlying inflation remained essentially flat, easing pressure on the Federal Reserve to raise interest rates. According to data released Tuesday by the Bureau of Labor Statistics, the Consumer Price Index (CPI) fell 0.4% in May but rose 3.5% year-over-year. The core CPI, excluding food and energy, was unchanged in May but rose 2.6% year-over-year. The report indicated that the decline in gasoline prices in June provided some relief to consumers as the worst of the energy price shock triggered by the Iran war began to subside. Federal Reserve officials are likely to welcome the data ahead of their meeting at the end of the month; however, renewed tensions between the U.S. and Iran, leading to a rise in oil prices, could prolong the inflationary effects of the conflict. U.S. stock index futures rose and Treasury yields fell as investors reduced their bets on a July rate hike by the Fed. Data showed that core inflation was subdued, primarily due to falling prices for goods such as clothing and used cars. Motor vehicle insurance premiums also fell sharply.Following the release of the CPI data, both WTI and Brent crude oil prices remained relatively stable in the short term, trading at $79.76 per barrel and $85.5 per barrel, respectively.The yield on the two-year U.S. Treasury note fell 10 basis points to 4.18% on the day.Federal Reserve Chairman Warsh: Job growth is in line with labor force growth. The unemployment rate is low and has not changed much over the past year. Layoffs have been relatively few.Market pricing indicates that bets on a Fed rate hike this month have been lowered.

Gold Prices Increase in Response to Inflation Fears And Ukraine Concerns

Charlie Brooks

Apr 08, 2022 09:26

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By 2:13 p.m. ET, spot gold XAU= was up 0.5 percent to $1,934.69 per ounce (1812 GMT). Gold futures in the United States increased by 0.8 percent to $1,937.80.


"Once inflation resumes, which I believe it will, it will work in favor of gold, even in the face of the Fed's aggressive monetary policy," Jim Wycoff, senior analyst at Kitco Metals, said.


The Fed's March meeting minutes revealed growing anxiety among officials that inflation had spread across the economy, with "many" members preparing to hike interest rates in large 50-basis-point increments in the coming sessions. 


Rising interest rates in the United States raise the potential cost of bullion holdings while strengthening the currency.


The dollar index =USD eased off a near two-year high reached earlier in the day, while benchmark US 10-year Treasury rates likewise remained around a multi-year high reached on Wednesday. 


Ukraine has increased its requests for crushing financial penalties to compel Moscow to terminate the conflict, while NATO nations have decided to bolster their support for Kyiv. 


Wall Street's major indexes sank for the third consecutive day, as growth stocks extended losses on worries about a more hawkish Federal Reserve and the Ukraine crisis.


Palladium XPD= increased by up to 3.7 percent to about $2,278 per ounce.


"Palladium has historically been quite volatile. Today's focus is on recouping some of yesterday's losses, "Miguel Perez-Santalla, Heraeus Metals Management's head of trading, sales, and marketing in New York, concurred. (Entire Story)


Russia produces between 25% and 30% of the world's palladium, a metal used by manufacturers to decrease pollution from engine exhausts.


Silver XAG= increased 0.6 percent to $24.58 per ounce, while platinum XPT= increased 0.9 percent to $961.53.

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