Gold prices and U.S. stocks agreed on Friday to ignore improving inflation data from the world’s largest economy: the precious metal advanced; equities retreated.
Gold for April delivery rose 0.5% to 1,232.30 at 12:14 p.m. on the New York Mercantile Exchange’s Comex division.
The 30-member Dow Jones Industrial Average surrendered 0.3% to 16,363. The S&P 500 lost 0.1% to 1,915. The tech heavy Nasdaq Composite reversed earlier losses, gaining 0.4%.
Stock fell as oil prices plunged again due to continuous glut worries, pressuring energy stocks. Brent for April delivery fell 4% to $32.92.
Friday’s positive inflation data was brushed aside by investors although the report signaled underlying strength in the economy, something that should keep the Federal Reserve on track to gradually raise interest rates.
The Consumer Price Index, stripping out the volatile food and energy prices, increased 0.3% last month, faster than the 0.2% increase predicted by analysts surveyed by Reuters.
The CPI core rate was the biggest gain since August 2011 and followed a 0.2% rise in December. In the meantime, the overall CPI was unchanged in the first month of 2016 after slipping 0.1% in the last month of 2015.
The underlying U.S. inflation was lifted thanks to rising rents and medical costs. In January, the rental index increased 0.3% after a similar rise in December. Medical care costs rose 0.5%.
But the Fed’s preferred inflation gauge — the core personal consumption expenditures — rose at an annual pace of just 1.4% in December, far shy of the central bank’s target of 2% for the past four years.
Investors seeking safe haven on Friday helped gold prices continue their year-to-day rally above 16%.