Recent Inflation Data Positive For Gold Price – Mitsubishi

San Francisco (May 27)  Precious metals have shed recent gains not only because of a strong U.S. dollar and better-than-expected economic data, but also because of another fall in oil prices that dampened inflation expectations, says Jonathan Butler, precious metals strategist at Mitsubishi. He adds that little progress in the Greek debt talks have also pressured the euro, maintaining the dollar’s strength. However, Butler says inflation data has not been all bad for gold, with U.S. CPI inflation data falling deeper into negative territory in April. “This ongoing deflationary trend, which is moving away from the Fed’s 2% inflation target, suggests there is still some uncertainty on whether the FOMC will indeed start to raise rates in September/October – this may be an upside factor for gold in the months ahead,” he notes. Looking at key levels for gold, he says there is decent support at $1,180/oz.

Source: KitcoNews