Gold Rallies As Dollar Slumps

Gold Rallies As Dollar SlumpsLos Angeles CA, January 12 (Tangible Investments) — by James O’Dell — Precious metals prices turned higher across the board on Friday. Gold rallies as dollar slumps. The yellow metal is up 0.73 percent to $1,331.50 an ounce after gaining $5.60 on Thursday to close at $1,321.90.

Silver is up 0.74 percent to $17.09 an ounce after gaining $0.01 on Thursday to close at $16.96 an ounce. The Gold/Silver ratio rose to 77.94. Platinum is up 1.12 percent to $994.00 an ounce. Palladium is up 2.04 percent to $1,098.00 an ounce.

Gold rose in early trading on Friday following a Commerce Department report showing December retail sales rose by 0.4 percent. The weaker-than-expected sales fell below consensus estimates for around a 0.5 percent increase, while November sales were revised upward from 0.8 percent to 0.9 percent.

The U.S. Labor Department reports that the Consumer Price Index rose 0.1 percent as expected in December. Monthly core inflation, however, beat economists’ expectations of 0.2 percent with an increase of 0.3 percent.

Inflation Remains Muted

But despite the stronger-than-expected increase in monthly core inflation, annual inflation remains muted, increasing just 1.8 percent in December. “The 12-month change has now been either 1.7 or 1.8 percent for eight consecutive months,” said the report.

Lagging inflation has been the reason the Fed has been able to keep interest-rate hikes slow and steady. Gold remains on pace for a 5th straight weekly gain as the dollar fell sharply against the euro.

Analysts believe that Gold could move higher should it end the week above $1,330.00 an ounce. Meanwhile, the equity markets haven’t seen a down move of 3 percent or higher in two years and yet continue to march higher after the recent tax cuts.

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