At a speech before the congress, Fed Chairman Ben Bernanke warned that the US economy is not out of woods yet. Meanwhile, he echoed what President Obama said about the fiscal issue of the country, noting "raising the debt ceiling gives the government the ability to pay its existing bills - it doesn't create a new deficit". Concerning QE measures, Bernanke indicated that previous measures have successfully brought "down long-term rates down pretty significantly" and stressed that he did not see "significant inflation" would be a result of Treasury buying.
In Japan, Prime Minister Abe talked about appointment of the new BOJ Governor. He reiterated the importance of aggressive monetary easing and stated that the next Governor should push "bold monetary policy". Japanese yen weakened further after his comments. Gold should be sent higher with one more government pledging to stick to monetary easing.
On the dataflow, headline CPI in the UK stayed at +2.7% y/y in December while core inflation eased to +2.4% from +2.6% in November. In the US, the Empire state manufacturing index probably improved to 0 in January from -8.1 a month ago. Advanced retail sales probably gained +0.2% m/m in December, down from +0.3% in the prior month. Excluding autos, retail sales might have risen +0.2% after a flat reading in November.
Oil and Gold Reports contributed by Oil N' Gold