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,
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,
Silver for December delivery SIZ21,
Among other metals traded on Comex, December copper HGZ21,