Despite year-over-year increases in goods prices, real-time measures of monetary inflation gave the Fed a little more room to maintain its accommodative stance this week. Producer prices for finished goods rose 4.4 percent over the past year, according to a U.S. Bureau of Labor Statistics report released Tuesday. Earlier, the BLS reported consumer prices rising at a 2.7 percent annual pace.

Year-Over-Year Inflation Rates (Through December 2009)

Key inflation markers for the week ending Thursday:

• London gold prices fell 2.5 percent to average $1,127 at the morning fix; spot COMEX settlements averaged $1,125, down 3 percent; average daily COMEX volume rose 3.4 percent to 231,500 contracts, while open interest increased 2.8 percent to a 528,500-contract average.

• Three-month London gold lease rates rose by 9 basis points (0.09 percent), a precipitous increase wrought by the easing in forward rates to historic lows.

• COMEX gold stocks rose by 61,120 ounces to 9.87 million; warehouse supplies now cover 18.7 percent of COMEX open interest.

• In a reversal of fortunes, junior gold mining stocks, proxied by the Market Vectors Junior Gold Miners ETF (NYSE Arca: GDXJ), fell 12.3 percent versus a 10.5 percent dip in the value of the Market Vectors Gold Miners ETF (NYSE Arca: GDX), a fund comprising senior miners; the S&P 500 Composite declined 2.6 percent.

• The NYMEX nearby crude oil contract lost 3.6 percent to finish at $76.08; as a result, the gold/oil multiple ticked up from 14.3x to 14.4x.

• The three-month TED spread, an indicator of financial institutions' willingness to lend to one another, held steady at 21 basis points due to sticky Treasury rates and a stubborn LIBOR.

• COMEX-implied one-year interest rates shrank to 63 basis points, a 32-basis point premium to Treasurys; the previous week's premium was 49 basis points.

• Long bond rates fell 13 basis points, further leveling the Treasury yield curve to 4.46 percent.

• The U.S. dollar strengthened 2.2 percent against the euro; the eurozone's currency was worth an average $1.4385 in interbank dealings this week.

• Year-over-year monetary inflation averaged 3.1 percent, up from last week's 2.7 percent mean, bringing the real return on three-month Treasury bills to -288 basis points; the average annual monetary inflation rate over the past decade is now 4.7 percent.

Real-Time Monetary Inflation