MTECHTIPS:-Gold slides to session lows as robust data points to
MTECHTIPS:-Gold slides to session lows as robust data points to March rate hike
MTECHTIPS- Gold prices were under pressure in North American morning trade on Wednesday, sliding to the lowest levels of the session as upbeat U.S. inflation and retail sales data boosted expectations of a March rate hike. Gold for April delivery on the Comex division of the New York Mercantile Exchange slumped $5.10, or about 0.4%, to $1,220.45 a troy ounce by 8:50 AM ET (13:50 GMT), after losing 40 cents on Tuesday. Prices sank to $1,217.50 earlier, a level not seen since February 3. U.S. consumer prices rose at the fastest pace since February 2013 in January, indicating that inflation is gathering momentum. The Commerce Department said that consumer prices increased 0.6% last month, compared to forecasts for 0.3%. Year-over-year, consumer prices were 2.5% higher from the same month a year earlier, the biggest increase in a 12-month span in five years. A separate report showed that retail sales in the U.S. rose more than expected in January, bolstering optimism about consumer spending being able to push economic growth at the beginning of 2017.U.S. retail sales rose 0.4% in January from the prior month, compared to expectations for a 0.1% increase. Investors raised their outlook on a faster pace of U.S. rate increases following the robust data. Fed fund futures priced in around a 27% chance of a rate hike in March, according to www.mtechtips.com’ s Fed Rate Monitor Tool, up from about 17% ahead of the data. Odds of a June increase was seen at around 74%. The yellow metal was already on the back foot after Federal Reserve Chair Janet Yellen left the door open to an interest rate increase at the central bank’s March policy meeting.
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