Gold pushed sharply higher today after data from the US showed that inflation remained steady and retail sales fell short of forecasts.
Retail Sales fell 0.2% in the previous month and core inflation declined to 1.6% on an annual basis along with a 0.2% drop in the previous month. Gold jumped to a high of $1232.05/oz from $1221.0/oz after the report. The disappointing figures today raise concerns over whether the Federal Reserve would be able to raise interest rates this year as the inflation measure – CPI is one of the key indicators the FED uses to gauge inflation, weaker than expected consumer spending also puts to doubt the FED view of a stronger economy. The dollar index fell off its highs quickly boosting bullion higher today.
…On the upside, a daily close above resistance at $1230.0/oz (Rs.28,020) could see early signs the bulls make a comeback and aim for $1270.00-$1290.00/oz (Rs.28,900-Rs.29,400) in the short term.