Gold Prices Decline Amid Rise in Inflation Rate in the U.S.A

Gold declined in the early hours of Thursday morning but the yellow metals price still nears its one-week high. With the U.S inflation data pointing out the need for an increase in interest rate, U.S dollar declined as well as treasury yield figures.

Gold prices decreased marginally to $1,826.05 representing a 0.07% decrease as at 4:18 AM GMT. Consequently, the dollar increased slightly as it has an inverse relationship with gold.

Data released by the U.S bureau of labor statistics shows the U.S. core consumer price index (CPI) grew 0.6% month-on-month and 5.5% year-on-year in December. The CPI grew 0.5% month-on-month 7% year-on-year.

The heightened inflation figures has increased the tendency of the U.S. Federal Reserve hiking interest rates at the March Meeting in 2021.

More evidence of a likely interest rate spike is the Fed St. Louis President James Bullard, telling the Wall Street Journal that four rate increases may be justified in 2022 amid high inflation. Fed Bank of Cleveland President Loretta Mester and Atlanta Fed leader Raphael Bostic separately interest rate hikes as soon as March 2022.

Richmond Fed President Thomas Barkin, Philadelphia Fed President Patrick Harker, and Chicago Fed President Charles Evans are among the Fed officials speaking later in the day. New York Fed President John Williams will speak on Friday.

Meanwhile, according to data from the Reserve Bank of Zimbabwe, Zimbabwean gold production rose by 55.5% in 2021..