Gold prices climbed nearly 2 percent on Wednesday, rebounding from early losses that followed stronger-than-expected US inflation data, as the dollar surrendered gains and equities swung higher. The dollar initially rose after the US Labour Department report showed US consumer prices increased more than expected in January, and traders bet the US Federal Reserve would boost interest rates faster than previously forecast.
However, softer-than-forecast retail sales data and an immediate pullback in equities markets sparked concern that the Fed would struggle to raise rates quickly enough to offset inflation pressures. Spot gold was up 1.7 percent at $1,351.81 per ounce by 1:37 p.m. EST (1837 GMT), after reaching $1,355.08, its highest since Jan. 26. US gold futures for April delivery settled up $27.60 per ounce, or 2.1 percent, at $1,358.
Bullion was on track for its strongest daily performance since May 2017. Inflation fears generally prompt investors to buy the precious metal. "Gold investors are looking into gold as a hedge against inflation and higher inflation expectations are boosting an interest in gold," said Suki Cooper, precious metals analyst at Standard Chartered Bank.
Meanwhile, silver was up 1.9 percent at $16.86 an ounce after hitting a one-week high of $16.98. Palladium gained 1.8 percent to $1,002.25, earlier hitting a one-week high $1,004.60 high. Platinum rose 2 percent at $993.24, earlier hitting $998.80, its highest in nearly three weeks. The platinum market is set for another surplus this year after recording oversupply of 110,000 ounces in 2017, Johnson Matthey said in a report on Wednesday, though sister metal palladium is tipped for another deficit.
Comments
Comments are closed for this article.