Gold prices neared a five-month high touched in the previous session, after strong U.S. consumer price data prompted a rush into the precious metal seen as a hedge against inflation.
· Spot gold was up 0.6% at $1,861.39 per ounce.
· U.S. gold futures for December delivery settled 0.8% higher at $1,863.90 per ounce.
Elsewhere, spot silver jumped 2.4% to $25.21 per ounce, its highest since Aug. 6. Platinum gained 1.9% to $1,087.35 per ounce and palladium rose 2% to $2,060.21.
· Gold rose as much as 2% on Wednesday and hit its highest level since mid-June, after data showed U.S. consumer prices rose at their fastest pace in 31 years in October, underscoring signs inflation could stay uncomfortably high well into 2022.
· “The market is spooked with yesterday’s CPI data coming in as high as it was. Traders are looking at gold as being a safety asset, as a hedge against this inflation risk,” said Bob Haberkorn, senior market strategist at RJO Futures.
“The reading that we saw yesterday could be another push back up to $1,900 an ounce for gold,” Haberkorn said, adding the market does not believe a rate increase is on the cards right now.
· Reduced stimulus and interest rate hikes tend to push government bond yields up, raising the opportunity cost of gold, which pays no interest.
· Gold has scaled new peaks over the past few sessions after major central banks indicated last week interest rates would remain low in the near term, with the Federal Reserve maintaining its stance that inflation was “transitory”.
However, since then, Fed officials have raised concerns about longer-lasting inflation.
· “While the narrative had developed in the wake of the FOMC meeting last week that the Fed would look through high inflation numbers... these numbers (CPI data) were sufficiently hot to jolt the market,” said Saxo Bank analyst Ole Hansen in a note.
· SPDR GOLD HOLDINGS:
BACK TO NET BUY 0.58 TONNES PREVIOUS SESSION
· Dollar hits 16-month high, stocks rebound after inflation scare
The dollar rose on Thursday, hitting a 16-month high a day after the strongest U.S. inflation reading in more than three decades, while equities gained on expectations higher consumer prices will help corporate growth.
The dollar index looked set for a second straight day of gains, touching a session peak of 95.197, its highest since July 22, 2020. It was last up 0.36% at 95.1630.
The dollar pushed the euro below $1.15, leaving the next major chart support level down at $1.12. European stocks moved higher, sensing the potential for a competitive boost, but Japan’s yen hit a four-year low at 114.15 per dollar.
· Oil bounces around, settles up despite strong dollar, near $83/barrel
Oil rose above $83 a barrel before easing a bit as the market grappled with a stronger dollar and concerns about faster U.S. inflation after the Organization of the Petroleum Exporting Countries cut its 2021 oil demand forecast due to high prices.
Brent crude settled up 23 cents at $82.87 a barrel.
U.S. crude rose 25 cents to settle at $81.59 a barrel.
· Bitcoin hit a fresh record at $69,000 before dipping back to trade about 0.19% higher around $65,046.30.
· The U.S. Treasury market was closed in observance of Veterans Day, or Armistice Day elsewhere.
· Nasdaq rebounds after inflation-driven sell-off, Disney weighs on the Dow
European shares rose after Goldman Sachs said regional earnings have been resilient to supply chain snags, a message that echoed on Wall Street as investors view the impact on rising prices as temporary but positive for corporate profits.
· EU Commission raises 2021 euro zone growth forecast, sees strong 2022
The Commission said gross domestic product in the 19 countries sharing the euro would grow 5.0% this year after a 6.4% recession in 2020. It forecast growth of 4.3% in 2022 and 2.4% in 2023. Its forecast in May for 2021 growth was only 4.3%.
· Bank of Mexico hikes rate again as inflation spirals
The Bank of Mexico raised its benchmark interest rate by 25 basis points for the fourth straight policy meeting on Thursday, taking it to 5.00%, in a 4-to-1 vote by its governing board, as markets looked forward to more hikes down the pike.
· Xi is expected to invite Biden to the Beijing Winter Olympics, sources say
President Xi Jinping is expected to use the discussion, expected next week, to extend a personal invitation to President Biden attend the events in Beijing in February, sources said.
The invitation would serve as a challenge to Biden to decline, and put the relationship on ice; or accept, and contradict his administration’s own messaging on democracy and human rights.
· Covid-19 Updates:
· Germany was once praised for its Covid response. Now it’s seeing 50,000 cases a day, prompting a dramatic warning
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