Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
Forthcoming consumer price inflation data for February should show that the Reserve Bank of India (RBI) remains on course to meet its target for the start of 2016, which has now been formalised under the new monetary policy framework.
But further ahead, given the weight of volatile food and fuel prices in the CPI basket, the RBI can't be complacent about its chances of meeting the target of 4 ±2% for the end of FY16/17.
Inflation came in at 5.1% y/y in January. No historic data have been provided, making it difficult to know for sure if price pressures are rising or falling under the new series.
Either way, inflation is comfortably below the RBI's 6% target for January 2016, which has been made official under the new monetary policy framework.
Capital Economics notes in a report on Monday:
- Looking ahead, a lack of historic data make it difficult to know what exactly is likely to happen to CPI inflation. But based on the old series, we can at least have a stab. Weekly data on vegetable prices are consistent with another pick-up in vegetable inflation last month.
- We think that meeting the new target of inflation 4 ±2% will prove to be a tougher challenge, particularly if volatile food and fuel prices (which, despite the revisions, still account for nearly 55% of the CPI basket) were to spike.
