5.9k Share this

Gold futures rose for a fourth straight day Tuesday, headed for their highest settlement in a month, as U.S. data showed annual inflation climbed above 8% in March for the first time in 40 years.

The U.S. rate of inflation in the past year moved up to 8.5% in March from 7.9%, the government said Tuesday. The last time inflation breached 8% was in January 1982. The consumer price index jumped 1.2% last month — the largest monthly gain since Hurricane Katrina in 2005 — driven by the higher cost of gasoline, food and housing.

“Gold continues to benefit from the tailwinds provided by spicy inflation numbers,” including [Tuesday’s] reading, which some are calling the prelude to a peak,” Adam Koos, president at Libertas Wealth Management Group, told MarketWatch. “Not even interest rates or the rise in the [U.S. dollar] can seem to stop the higher prices in the yellow metal.”

Gold for June delivery GC00, +1.38% GCM22, +1.38% rose $29.70, or 1.5%, to $1,977.90 an ounce on Comex after eking out a third straight gain on Monday. Based on the most-active contract, prices were on track for their highest finish since March 11, FactSet data show. May silver SIK22, +2.81% rose 82.8 cents, or 3.3%, to $25.815 an ounce, eyeing the highest finish since March 24,

Koos said the market is likely to see a pause at some point in the inflation data sometime in the coming months.

The U.S. core rate of inflation that strips out food and energy rose just 0.3% last month.

But for any “lull to become permanent, countries such as China are going to have to put a stop to their “zero COVID” policies, which will continue to bottleneck the supply chain and feed the inflation monster,” Koos said.  As soon as they realize COVID is “going to be around for a long, long time — that’s when we’ll start to see softer CPI numbers.”

In terms of interest rates, Koos said he doesn’t know if we’ve seen the long-term bottom, but I “we’re close to a short-term high, and any pullback in rates is going to be a catalyst for gold to move higher.”

Gold gained ground Tuesday as U.S. Treasury yields pulled back, with the 10-year yield trading at 2.71%, after touching highs above 2.8% for the first time since January 2019. A fall in yields can lower the opportunity cost of holding nonyielding assets like gold.

In other metals trading, May copper HGK22, +1.67% tacked on 1.7% to $4.715 a pound. July platinum PLN22, -0.72% added 0.3% to $981 an ounce and June palladium PAM22, -2.89% traded at $2,378 an ounce, down 1.6%.

Source: This post first appeared on http://marketwatch.com/

5.9k Share this
You May Also Like

‘Downton Abbey 2’ Nabs Okay $16 Million Weekend

Downton Abbey – A New Era Focus Features As noted yesterday, Focus…

Hyundai Is Tesla’s Latest Challenger With Plans For $5.5 Billion U.S. EV, Battery Plant

Hyundai Motor Group Chairman Euisun Chung Hyundai Motor Group Hyundai Motor Group…

‘Downtown Abbey 2’ Nabs Okay $16 Million Weekend

Downton Abbey – A New Era Focus Features As noted yesterday, Focus…

Is The Queen, At 96, Fit To Party ‘As Never Before’?

Britain’s Queen Elizabeth II during a reception at her Norfolk residence to…

The Market Is Melting Down and People Are Feeling It. ‘My Stomach Is Churning All Day’

The last time Todd Jones heard this kind of panic in his…

Trading Up Or Staying Put? The Hornets Have Some Decisions To Make

CLEVELAND, OHIO – FEBRUARY 20: Michael Jordan reacts after being introduced as…

Who Won the U.S.-China Trade War?

Between 2018 and 2020, the U.S. and China fought the biggest trade…

Can Nokia Stock Continue Weathering The Storm In The Broader Markets?

Nokia logo exhibited at Nokia stand during the Mobile World Congress (MWC)…