Gold rose on Wednesday and settled at its highest level since June as data showing the US inflation rate at a three-year high pushed bullion prices higher for the fifth consecutive session. So, what are the analysts saying?
Analysts’ gold expectations
cryptocoin.com As we reported, the US government said on Wednesday that the cost of living rose sharply again in October, with the consumer price index rising 0.9 percent last month. Naeem Aslam, chief market analyst at AvaTrade, said in a market update that gold is “an excellent inflation hedge” and that metal prices are making “serious upward moves” after the US data. He thinks these moves came as traders believed the Fed was behind the curve and needed to do something to control the pace of inflation.
On the other hand, US stock indices traded substantially lower, providing support for safe gold ahead of the holiday season. Juan Carlos Artigas, head of global research at the World Gold Council, said the rise in inflation was supported by “significant rises in wages and supply chain disruptions, particularly associated with the transport sector”.
Looking ahead, we believe there is a significant risk that high inflation may persist as a by-product of the knock-on effects of monetary and fiscal policies implemented in response to the COVID-19 pandemic. This, in turn, should support investment demand for gold as a hedge against inflation risk.
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