Consistent with the Fed's view that 'with substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time', headline CPI stayed flat in February, following a modest +0.2% rise in the prior month. CPI for all commodities fell -0.2% while that specifically for energy slid -0.5% during the month. Despite rallies in oil prices, decline in natural gas price probably more than offsetting the gains.

WTI crude oil dropped to as low as 81.68 before recovering to 82.2, down -0.88%. Profit-taking after a strong-2-day rally, lingering worries over Greek deficit and Chinese tightening were key factors pressuring price.

Natural gas plummeted -5.1% to close at 4.085, the lowest level in 5 months, Thursday as decline in gas inventory was less than expected. According to the US Energy Department, gas inventory drew -11 bcf (consensus: -40 bcf) in the week ended March 12. Current level, at 1615 bcf, is +4.7% higher than 5-year average.

Gold was one of the few commodities that recorded gains Thursday. The benchmark contract for the yellow metal edged higher, by+0.29%, to 1127.5. We were impressed to see gold rise in spite of USD's strength yesterday.

Gold's identity has been blurred in recent decades. Although gold has been well-known as a safe haven that protects investors' wealth during times of uncertainty, and an inflation hedge, it is traditionally denominated in USD and has been categorized as commodities - risky assets- in recent years. For a number of times, gold's performance was inline with other commodities such as crude oil and base metals, rising when risk appetite increased and falling when investors were risk-averse.

As an effective hedge against fluctuations in USD, gold has demonstrated significant inverse correlation with the dollar's movement, However, as USD has been treated as safe-asset, especially after the recent global recession, gold's 'safe-haven' status has been ambiguous.

That said, investors seem to have recall gold's safe haven status in the recent sovereign crisis in Greece. Since December 2009, the yellow metal has been moving in the same direction as the spread between Greek-German 10-year bond yield. This suggests gold price rises as investors get more worried about Greece's financial situation.