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The yellow metal enjoyed another positive session this week. Gold extended the shallow recovery from last week as the US Dollar continued its sell-off. The greenback was shunted lower this week in response to the latest inflation data which came in weaker than expected.
Both headline and core inflation were lower than was expected year on year in February, despite posting a small monthly gain. The readings come on the back of the February jobs report last week. This showed wage growth rising to a cycle high of 3.4%. The result suggested that higher labor costs are yet to feed into higher consumer prices.
One reason for this has been greater productivity over the last year. This productivity has allowed businesses to absorb increased labor costs into wider profit margins rather than needing to pass them on to the consumer.
The USD sell off continued over the week. This was despite better than expected durable goods orders in January, which rose 0.4% vs. an expected contraction of ...
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