NEW YORK: Gold led a rally in precious metals on Wednesday, rising as much as 2% to a five-month high as a surge in U.S. consumer prices last month burnished bullion’s appeal as an inflation hedge.
Spot gold was up 1.4% at $1,857.30 per ounce by 10:38 a.m. ET (1538 GMT), having earlier hit its highest since June 15 at $1,868.2.
U.S. gold futures rose 1.7% to $1,861.60.
“Once again we have hot inflationary data,” said David Meger, director of metals trading at High Ridge Futures. “Gold being the quintessential hedge against inflation, we believe inflation is the underlying positive environment that will foster the gold market rally in the weeks and months ahead.”
U.S. consumer prices increased more than expected in October as the cost of gasoline and food surged, leading to the biggest annual gain since 1990.
“This environment is a double-edged sword because as inflationary data continues to come out hotter than expected, the concern will be whether the Federal Reserve reduces liquidity faster than anticipated,” Meger said.
Latching onto gold’s coattails, spot silver rose 3.2% to $25.06, platinum jumped 2.7% to $1,087.10 and palladium gained 1.6% at $2,053.01.
The rally came despite strength in the U.S. dollar, which usually weighs on demand for greenback-priced precious metals from holders of other currencies.
Safe-haven gold, on course for a fifth straight day of gains, also drew support from a slide in real yields on U.S. Treasuries and the overall risk-off sentiment that pushed down Wall Street’s main indexes.
Its break above the key resistance level of $1,835 per ounce is important and a close above the $1,851 mark could ignite upward momentum towards $1,900, said Standard Chartered analyst Suki Cooper.
“Gold has a solid floor to build price momentum from given the seasonally strong demand from India,” she said.—Reuters
Soybean futures extend gains
CHICAGO: Chicago Board of Trade soybean futures rose on Wednesday as the market rebounded after prices on Tuesday dropped to their lowest level since December 2020.
The market hit the 11-month low before the U.S. Department of Agriculture on Tuesday issued a lower-than-expected U.S. soybean crop estimate in a monthly crop report.
The USDA reduced its yield and production projections from October, wrong-footing analysts who had on average expected the agency to raise its harvest outlook.
“The market was oversold,” said Jason Roose, analyst at Iowa-based brokerage U.S. Commodities.
The most active soybean contract on the Chicago Board of Trade (CBOT) was up 6-3/4 cents at $12.18-3/4 a bushel by 10:25 a.m. CST (1625 GMT). Corn was up 8-1/2 cents at $5.63-1/4 a bushel, while wheat was up 14-1/2 cents at $7.93 a bushel at the CBOT.
“There’s short covering in the market,” Roose said.
Concerns about easing soybean imports from China, the world’s largest buyer of the oilseed, continue to hang over soy futures, traders said.
The market is readjusting to the “notion of smaller rather than larger 21/22 U.S. supplies, although headwinds from dismal export demand is not expected to abate soon,” said Rich Feltes, head of market insights for broker RJ O’Brien.
Expectations for a large soybean crop in Brazil also are keeping a lid on gains, traders said. A bumper Brazilian crop could challenge U.S. exports in early 2022 as the countries compete for sales on the global market.