14/12/2022–|Last update: 12/14/202203:36 AM (Makkah)
On Tuesday, economic data showed a decline in the inflation rate in the United States, as consumer prices recorded last November the lowest monthly increase in more than a year, which indicates the possibility of overcoming the worst part of the American inflation crisis, which pushed oil and gold prices to rise.
Bloomberg news agency quoted a statement by the US Department of Labor as saying that the core inflation rate, which excludes the most volatile food and energy prices, was 0.2% per month, compared to 0.3% in October, and 6% annually, compared to 6.3% in the previous month.
The consumer price inflation rate during last November was 0.1%, compared to 0.4% per month during the previous month, and the annual inflation rate reached 7.1%, compared to 7.7% during the same period, thanks to the decline in energy prices in exchange for the increase in food prices.
Analysts had expected inflation to slow to 7.3% in November.
The report of the Ministry of Labor – which is the last during the current year – indicated that the rate of inflation has begun to decline, although it is still very high.
The energy index rose by 13.1% over the past month on an annual basis, while the food index rose by 10.6%, which are less increases than those recorded last October.
Consumer prices in the United States reached a peak of nearly 41 years last June, recording 9.1%.
During the current year, the US Federal Reserve implemented 6 interest rate increases, the last 4 of which were by 75 basis points, while it is expected to raise the interest rate by 50 basis points in a statement issued on Wednesday.
The dollar is falling
As a result, the dollar index fell more than 1% to its lowest level in regarding 6 months, which reinforces expectations that the Federal Reserve (the US central bank) will reduce the pace of raising interest rates on Wednesday, and the standard 10-year US Treasury bond yields also fell.
The Federal Reserve is scheduled to issue a policy statement on Wednesday, followed by a press conference by Bank President Jerome Powell. The Bank of England and the European Central Bank will also meet this week, and each is expected to raise interest rates by 50 basis points.
Oil is rising
Oil prices rose to more than $80 a barrel on Tuesday, with investors buying risky commodities following the release of US inflation data.
The market was also supported by concerns regarding supply disruptions, including the continued closure of the main “Keystone” oil pipeline carrying crude from Canada to the United States following a major spill.
Brent crude futures rose 3.4% to $80.84 a barrel by 16:41 GMT, and US West Texas Intermediate crude futures rose 3.4% to $75.66.
Gold jumps
Gold prices also jumped regarding 2% on Tuesday, to their highest levels in more than 5 months, following data showed a less-than-expected rise in US consumer prices.
Spot gold rose 2.1% to $1,817.64 an ounce by 14:36 GMT, its highest level since June 30.
US gold futures rose 2.2% to $1,830.90.
As for other precious metals, silver rose in spot transactions by 2.5% to $23.87 an ounce, platinum rose 4.1% to $1042.25, while palladium rose 4.3% to $1969.25.
