Inflation rose in February, and it appears that more inflation is coming down the road. This development can, in fact, be good for gold.
The U.S. CPI inflation rate rose 0.4% in February, following a 0.3% increase in January. The jump was driven by a 6.4% spike in gasoline prices. The core CPI rose 0.1%, following no change in the preceding month.
So, inflation rose a bit in February, which is more clearly seen on an annual basis. The overall CPI increased 1.7% over the last 12 months, following a 1.4% increase in January. Core CPI rose 1.3%, following a 1.4% rise in the preceding month. Hence, as the chart below shows, although inflation remains below the Fed’s target, it has increased significantly since the bottom in May 2020.
CPI and Core CPI Inflation Rates.