Gold price is rising rapidly due to release of new inflation data, while value of US dollar is decreasing

Gold price is rising rapidly due to release of new inflation data, while value of US dollar is decreasing

US inflation data was released day before Fed's decision on interest rates, which is expected to remain at 5.25%. There are increasing predictions about how rest of 2023 will turn out, depending on future inflation data trends.

inflation data

In May, annual Consumer Price Index (CPI) increased by 4.0%, which was lower than predicted 4.1% growth rate. This is decrease from previous month's rise of 4.9%.

main inflation index increased by 0.1% in May, which is lower than expected 0.2% rise & slower than April increase of 0.4%.

In May, core consumer price index (excluding food & energy) increased by 5.3% year-over-year, meeting expectations. This was slight decrease from April's 5.5% rise.

Core Consumer Price Index (CPI) data for May rose by 0.4%, which was in line with expectations.

Conclusion

Inflation data in US has decreased since April, suggesting that Federal Reserve is succeeding in reducing inflation rates.

Federal Reserve's goal is to reduce inflation to 2%, which is still some distance away.

After data was released, stocks, gold, & bitcoin all increased in value, while dollar index & US Treasury bonds decreased.

Changes in interest forecasts before & after data release

At June meeting, which will be announced tomorrow, 78% of experts predict that Federal Reserve (Fed) rate will remain at 5.25%. However, 58.1% believe that Fed will raise this rate to 5.50% in July's meeting.

Expectations that Federal Reserve will maintain interest rates tomorrow have risen to 80.3%, while likelihood of an increase has dropped to 19.7% following release of positive inflation data.

Markets immediately data

spot price of gold is currently $1,968 per ounce, an increase of 0.5%. Gold futures contracts have recorded higher price of 1982 dollars per ounce, up by 0.57%.

US dollar index dropped 0.5% to 102.683 compared to other currencies.

NASDAQ has increased by 1.53%, Dow Jones Industrial Average has risen 0.56% & S&P 500 is up 0.93%.

Bitcoin has increased by 1.41% & is currently trading at $26,274 per token, while Ethereum has increased by 0.54%, to $1,756.59.