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Thursday, December 01, 2022

Gold at one-month high on inflation concerns

  • Gold investment demand very flat – Analyst
  • Rise in world stocks limited gold’s gains

December 28 (Reuters) – Gold rose to a one-month high on Tuesday on recent signs of rising inflation, although the metal gave up some early gains on a firming US dollar.

Spot gold was up 0.1% at $1,811.77 an ounce at 12:37 a.m. EDT (1737 GMT), having hit a high of $1,820 since Nov. 22. US gold futures rose 0.2% to $1,811.70.

David Meager, director of metals trading at High Ridge Futures, said the lack of growth in bond yields and the build-up of inflationary pressures are contributing factors to the gold market.

“The ongoing trend (for gold) remains higher in the near term, and we believe this trend is coming from a continuation of the inflationary pressures that we are seeing in the market.”

The US dollar gained 0.1% against a basket of peers, reducing gold’s appeal to holders of non-US currencies.

UBS analyst Giovanni Stanovo said gold prices are expected to remain around current levels early next year, but a rise in US interest rates and a fall in inflation could weigh on prices.

Bullion’s gains were also limited by gains in US equities, with the S&P 500 opening at a record high as investors remained unconvinced by Omicron-driven travel disruptions and store closures.

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Commodity analyst Jigar Trivedi said, “While there are concerns over the Omicron variant, investment demand (for gold) is quite flat. Hence, it is a year-end rally as there is still some risk-on sentiment.” In Mumbai based broker Anand Rathi Shares.

Silver rose 0.3% to $23.10 an ounce, while platinum climbed 0.9% to $979.54.

Palladium rose 1.9% to $2,007.36, having touched a more than a month high of $2,019 in the first session.

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Reporting by Kavya Guduru and Sehar Darren in Bengaluru; Additional reporting by Ashita Sivaprasad; Editing by Aditya Soni and Uttaresh

Our Standards: Thomson Reuters Trust Principles.

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