Gold price loses some ground following uptick in U.S. CPI inflation

New York (Mar 11)  Gold prices are holding on to positive gains but is under renewed selling pressure after U.S. inflation pressures picked up last month.

Wednesday, the U.S. Labor Department said its U.S. Consumer Price Index rose 0.1% in February, after a 0.1% rise in January. The data was slightly better than consensus forecasts, as economists were calling for an unchanged reading.

Annually, headline inflation has increased by 2.3%, down from January's reading of 2.5%. The report said that rising food and shelter prices compensated for falling energy prices. The all energy index dropped 2% last month.

Stripping out volatile food and energy prices, core inflation rose in line with expectations, increasing 0.2% in last month, following January's rise of 0.2%. For the year, core inflation is up by 2.4%.

Gold prices have dropped in reaction to the latest inflation data but are still holding on to gains for the day. April gold futures last traded at $1,665.20 an ounce, up 0.30% on the day. However, market analysts and economists note that economic data is not having much impact on market moves as investors remain focused on the spreading coronavirus and the effect it could have on the global economy.

By 12 noon EST spot gold was down $12 to $1,646, while spot silver slid more than 1% to $16.87. HOWEVER, spot palladium plummeted $100 to $2,313.

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