Gold Climbs To 1-month High As Inflation Data Fuels Safe-haven Buying

Gold prices moved higher on Tuesday, extending gains to a fourth straight session, and lifted the most active gold futures contract to a one-month closing high.

Gold prices climbed on safe-haven buying after data showed U.S. inflation moved above 8% in March, the highest level in 40 years.

The dollar’s recovery after fall from higher levels somewhat limited gold’s uptick. The dollar index, which dropped to 99.74, after hovering around the 100 mark in the Asian and European session, climbed to 100.21 subsequently, gaining nearly 0.3%.

Gold futures for June ended higher by $27.90 or about 1.4% at $1,976.10 an ounce, the highest settlement since March 11.

Silver futures for May ended up by $0.748 at $25.735 an ounce, while Copper futures for May settled at $4.7095 per pound, gaining $0.0755.

Data from the Labor Department showed the consumer price index surged by 1.2% in March after climbing by 0.8% in February. The sharp increase in consumer prices matched economist estimates.

The annual rate of consumer price growth accelerated to 8.5% in March from 7.9% in February, showing the fastest growth since December 1981.

Meanwhile, the report showed core consumer prices, which exclude food and energy prices, edged up by 0.3% in March after rising by 0.5% in February. Economists had expected another 0.5%.

Core consumer prices were up 6.5% year-over-year in March, reflecting an uptick from the 6.4% jump in February. The annual growth represents the biggest increase since August 1982.

“The surge in energy prices helped drive headline CPI inflation up to a new 40-year high of 8.5% in March but, with base effects set to become much more favorable and signs that monthly gains in core prices are moderating, we expect that to mark the peak,” said Hunter.

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