The report detailing the changes to the Consumer Price Index for the United Kingdom is expected to be released tomorrow 17 December 2013. The figures in the report will relate to the previous month of November 2013. At this time, many experts have expressed their belief that there will not be any significant changes to the numbers when compared with those from October. Analysts note that while no shifts are expected to appear in the central report, there is a possibility that the Core Consumer Price Index may rise slightly.
Readers are reminded that the CPI report is an important indicator of inflation in the economy. As the CPI measures the cost of a set basket of basic goods, it is sensitive to shifts in prices for consumers. As prices of these items rise or fall, it can affect the spending abilities of the public and therefore influence economic activity in that country or region.
As has been discussed, the economy in the UK has been on the rise in recent months, showing increased signs of strength while rebounding from the recession. Throughout the growth period, should the CPI report show that it has stayed relatively constant, it could indicate that the government is succeeding in keeping inflation in check for the time being.
Analysts do not expect to see any considerable effects to the pound in trading due to the release of this report.
American CPI to be Released Tomorrow
The United States is set to issue its Consumer Price Index tomorrow Tuesday 17 December 2013. In the release, there are two reports which are expected to be made public, the general CPI report and the CPI excluding food and energy. Currently, many experts expect there to be a slight increase in the CPI report while the report that does not take food and energy into account will likely remain constant with that of October 2013.
As noted in the report above, the CPI report is an important indicator of inflation in the economy. As the CPI measures the cost of a set basket of basic goods, it is sensitive to shifts in prices for consumers. As prices of these items rise or fall, it can affect the spending abilities of the public and therefore influence economic activity in that country or region.
Additionally, many economists often prefer to look to the CPI excluding food and energy because it is less susceptible to small shifts in the market. Thus they are provided with a clearer picture of larger movements in the market that can affect the economy.
Analysts assess that it is unlikely that this report will have any significant effects on the dollar in trading. That said, traders are advised to watch for continued shifts as investors are eagerly anticipating changes to the Federal Reserve?s monetary policy concerning the stimulus.
Investors Drop Gold Holdings at Increased Pace
It was reported on 16 December 2013 that gold prices had reached the sharpest drop in price in 32 years. The reports indicated that many investors were stepping away from their gold backed exchange traded products at a rapid rate, destroying the price of the precious metal.
Analysts note that the drop in prices stem from a number of factors, many of which have been discussed here previously. The turnaround for the US market can be considered a primary factor, as many investors fled to gold when they saw the downturn on the dollar. With the rebound of the dollar, traders are making their way back to the US currency by dropping their gold investments. In general, gold has fallen out of favor with many of the market leaders who have either dumped their own holdings or have announced that they will cease their purchases.
Traders are advised to watch for a continued spiraling of the prices on gold in the coming weeks as it finishes up one of its worst years on record.