MW: Gold falls as CPI data reduce inflation worries
NEW YORK (MarketWatch) -- Gold futures fell Wednesday after government data showed U.S. consumer prices fell in the past year at the sharpest pace in 49 years, reducing gold's appeal as a hedge against inflation. U.S. consumer price index fell 1.3% in the past year, the sharpest decline since April 1950, the Labor Department reported Wednesday. In a monthly basis, however, the CPI increased a seasonally adjusted 0.1% in May, rising for the first month in three. On the Comex division of the New York Mercantile Exchange, August gold fell $1.70, or 0.2%, to $930.50 an ounce. The Federal Reserve has warned that deflation remains a major risk to the economy, with the global recession putting downward pressure on prices.
