Gold gained on Friday as its safe-haven appeal was boosted by elevated U.S. consumer prices, which also cooled some bets for aggressive interest rate hikes since the jump in inflation was not as big as expected.
· Spot gold rose 0.5% to $1,782.44 per ounce at 01:38 p.m. ET (1838 GMT), having dropped for the past two sessions.
· U.S. gold futures settled up 0.5% at $1,784.80.
· "The latest inflation report did not come in as hot as some were expecting and that should keep Federal Reserve rate hike expectations between two or three rate hikes in 2022," Edward Moya, senior market analyst at brokerage OANDA, said.
"Gold prices will embrace today's report as it likely pushes back that first Fed rate hike into the middle of next year."
· Bullion also drew strength from a slip in the dollar, which increased its appeal for overseas buyers, and as U.S. Treasury yields fell after data showed U.S. consumer prices increased further in November, leading to the largest annual gain since 1982.
· "The potential for interest rate hikes does drag at the heels of the gold market, but the underlying fundamental theme is the inflationary pressures, which will be supportive," said David Meger, director of metals trading at High Ridge Futures.
· Focus will now be on the Fed's policy meeting on Dec. 14-15.
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· Vincent Tie, a sales manager at dealer Silver Bullion in Singapore, said gold was also seeing demand from "value-driven investors who are dollar-cost averaging their holdings with the price dipping under $1,800".
· Spot silver was up 1% at $22.15 per ounce.
· Platinum rose 0.3% to $937.68 per ounce and was on track for its first weekly gain in four.
· Palladium fell 3.2% to $1,754.57.
· Inflation surged 6.8% in November, even more than expected, to fastest rate since 1982
Inflation accelerated at its fastest pace since 1982 in November, the Labor Department said Friday, putting pressure on the economic recovery and raising the stakes for the Federal Reserve.
The consumer price index, which measures the cost of a wide-ranging basket of goods and services, rose 0.8% for the month, good for a 6.8% pace on a year over year basis and the fastest rate since June 1982.
Excluding food and energy prices, so-called core CPI was up 0.5% for the month and 4.9% from a year ago, which itself was the sharpest pickup since mid-1991.
Price increases came from familiar culprits.
Energy prices have risen 33.3% since November 2020, including a 3.5% surge in November. Gasoline alone is up 58.1%.
Food prices have jumped 6.1% over the year, while used car and truck prices, a major contributor to the inflation burst, are up 31.4%, following a 2.5% increase last month.
· U.S. yields little changed after CPI data
The yield on 10-year Treasury notes was up 0.2 basis points to 1.489%.
· Dollar slips after U.S. inflation data
The dollar shed early gains and turned lower on Friday after U.S. consumer prices increased further in November, posting their largest annual rise in 39 years as investors took profits before a Federal Reserve meeting next week.
The data, along expected lines, puts added pressure on policymakers to withdraw pandemic-era stimulus at a faster pace in coming months.
Against a basket of its rivals , the dollar briefly fell 0.1% to 96.10 before trimming losses in volatile trading. Money markets expect more than 60 bps in rate hikes from the U.S. central bank next year.
The dollar's losses pushed other currencies higher with sterling edging 0.2% higher to $1.324.
The euro , seen as vulnerable to a Federal Reserve hike especially if euro zone rate rises lag, trimmed losses to stand down 0.1% on the day at $1.1281.
· Bitcoin rises 2.1% to reclaim $50,000
· Bitcoin mining has totally recovered from Chinese ban
Bitcoin mining has totally recovered from the Chinese crypto crackdown that took more than half the world’s miners offline virtually overnight earlier this year.
· Fed is expected to speed up end of bond buying and signal interest rate hikes are coming
· At its meeting this week, the central bank is expected to speed up the pace at which it is withdrawing economic support. In practice, that means likely doubling the taper in bond purchases to $30 billion a month.
That would bring a program that had seen $120 billion a month in purchases to an end by around March 2022. After that, the Fed could start raising interest rates if inflation is still a problem.
· Wall St Week Ahead Investors await faster taper, inflation view at Fed meeting
Investors are bracing for the last Federal Reserve meeting of the year, with market participants hungry to learn how quickly the central bank plans to finish unwinding its bond-buying program and pick up signs of when it may start to raise rates in 2022.
· Moody's withdraws ratings of two Chinese property developers
Credit rating firm Moody's withdrew the ratings of default-striken Chinese property companies Modern Land (1107.HK) and Fantasia (1777.HK) on Friday blaming a lack of sufficient information from the firms.
Fantasia missed a bond payment in early October having said just two weeks previously that it had sufficient capital while Modern Land missed its first bond payment at the end of October.
· U.S. COVID-19 deaths reach 800,000 as Delta ravaged in 2021
· New CDC data shows first-known omicron Covid patient in U.S. had symptoms starting Nov. 15
· UK hikes its coronavirus threat level as omicron variant surges
· UK's Johnson warns of Omicron 'tidal wave', says two doses not enough
· Jefferies says COVID-19 spike was not caused by a specific incident
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