[vi] Gold price drops to session lows as U.S. CPI heats up in September

[vi]

[vi] (Kitco News) - Gold prices have fallen to session lows, testing critical support as hotter-than-expected U.S. inflation data reinforces expectations that the Federal Reserve will have to raise interest rates by year-end, increasing the opportunity cost of holding the non-yielding precious metal.

[vi] At the same time, higher energy prices are becoming embedded in the broader economy, which some economists have said could force interest rates to remain higher for longer.

[vi] The Consumer Price Index (CPI) rose by 0.6% last month, following August’s 0.4% increase, the U.S. Bureau of Labor Statistics announced Wednesday. The inflation data came in line with market expectations.

[vi] However, elevated energy prices continue to take their toll. The report noted that headline inflation rose by 3.7% over the last 12 months, up from the 3.4% reported in August. Economists had expected annual inflation to rise by 3.6%.

[vi] Core inflation, which strips out volatile food and energy prices, appears to be garnering the most attention as it rose more than expected. Core CPI increased by 0.3% last month, matching August’s 0.3% rise.

[vi] The report stated that annual core inflation rose to 2.6% last month, up from August's 2.4% increase. Economists had expected annual core inflation to rise to 2.5%.

[vi] As expected, gold is struggling in the face of growing inflation fears and is testing a critical support level. Spot gold last traded at $4,107.30 an ounce, down more than 1% on the day.

[vi]

[vi] [Neils Christensen](/author/neils-christensen)

[vi] Neils Christensen has a diploma in journalism from Lethbridge College and has more than a decade of reporting experience working for news organizations throughout Canada. His experiences include covering territorial and federal politics in Nunavut, Canada. He has worked exclusively within the financial sector since 2007, when he started with the Canadian Economic Press. Neils can be contacted at: 1 866 925 4826 ext. 1526 nchristensen at kitco.com @KitcoNewsNOW

[vi] https://twitter.com/@KitcoNewsNOWhttps://www.linkedin.com//neils-christensen-16904a18/

[vi] Tags:

[vi] goldgold pricesus economyUS interest ratesUS inflationUS CPIFederal ReserveinflationCentral banks

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[vi] Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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