Metals Stocks: Gold futures rally as the rate of U.S. inflation climbs to a nearly 31-year high
Gold futures rallied early Wednesday, as data showing the U.S. rate of inflation at its highest in three decades prompted bullion to stretch an advance to a fifth-consecutive session.
The cost of living rose sharply again in October, with the consumer-price index up 0.9% last month, the government said Wednesday. The pace of inflation over the past year marched to 6.2% in October — the highest rate since November 1990.
Gold is a “perfect inflation hedge” and prices for the metal have made “massive upward moves” in the wake of the data, said Naeem Aslam, chief market analyst at AvaTrade, in a market update. “This is despite the fact that the dollar index is up, as traders believe that the [Federal Reserve] is behind the curve and they need to do something to control the pace of inflation.”
The dollar was up 0.4% at 94.294, as gauged by the ICE U.S. Dollar Index
DXY,
+0.63%,
a measure of the buck against a half-dozen currencies.
U.S. benchmark stock indexes, however, traded broadly lower, providing support for haven gold since “inflation isn’t the best news” that the market needs ahead of the holiday season, said Aslam.
December gold
GCZ21,
+1.50%
GC00,
+1.50%
rose $35.40, or 1.9%, at $1,866.20 an ounce, with prices on track to notch a fifth straight session rise, the longest run since a five-day rise ended July 7, according to Dow Jones Market Data. Prices are poised to settle at their highest since June.
Silver for December delivery
SIZ21,
+3.48%
SI00,
+3.48%
tacked on 87.7 cents, or 3.6%, to $25.195 an ounce, with prices eyeing their highest finish since early August.
Among other metals traded on Comex, December copper
HGZ21,
-0.27%
climbed 0.5% to $4.394 a pound. January platinum
PLF22,
+3.09%
added 3% to $1,093 an ounce and December palladium
PAZ21,
+1.38%
traded at $2,044 an ounce, up 1.1%.
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