Gold scales 1-month peak as inflation angst bolsters appeal
Follow us Now on Telegram ! Get daily 10 - 12 important updates on Business, Finance and Investment. Join our Telegram Channel
https://t.me/InvestmentGuruIndiacom
Download Telegram App before Joining the Channel
Gold prices hit a one-month high on Wednesday, driven by demand for a hedge against soaring inflation amid the Russia-Ukraine war, easing pressure from expectations of an aggressive U.S. interest rate hike and a robust dollar.
Spot gold XAU= rose 0.5% to $1,977.07 per ounce by 10:30 ET (1430 GMT), after touching its highest since March 14 at $1,979.95. U.S. gold futures GCv1 were up 0.2% at $1,980.70.
Gold seems to be "ignoring the stronger dollar and rising U.S. rates and they seem to be singularly focused on inflation," said Edward Meir, an analyst with ED&F Man Capital Markets.
Data showed on Tuesday that U.S. monthly consumer prices surged in March, cementing the case for a 50 basis point interest rate hike from the Federal Reserve next month as it seeks to tackle inflation. (Full Story) (Full Story)
Gold is considered a hedge against inflation and geopolitical risks. However, rising U.S. interest rates would raise the opportunity cost of holding non-yielding bullion and boost the greenback in which it is priced.
The dollar index =USD touched a two-year high during the session buoyed by hawkish comments by Fed officials. USD/
"We're importing inflation here," said Daniel Pavilonis, senior market strategist at RJO Futures, adding there is "real scare of more inflation coming from the lack of exports, the lack of shipments and back orders and all the other shipping costs" due to the Ukriane crisis.
President Vladimir Putin said on Tuesday peace talks with Ukraine had hit a dead end signaling the war could grind on for longer. (Full Story) (Full Story)
Spot silver XAG= rose 1.2% to $25.66 per ounce, platinum XPT= gained 1% to $975.28, and palladium XPD= was up 1.2% to $2,354.63
