Gold hits 8-month high as investors awaited inflation data

Gold rose to its highest level in eight months today, Wednesday, supported by the decline in the dollar, but it is still moving in a relatively narrow range as investors await inflation data that may affect the Federal Reserve (the US central bank) raising interest rates.

And by 0615 GMT, gold prices in spot transactions rose 0.3 percent, the highest since May 2022.

According to Reuters, US gold futures rose 0.6 percent to $1,887.60 an ounce.

The dollar index fell 0.1 percent, making the dollar-denominated metal cheaper for buyers abroad.

US benchmark bond yields for ten years also fell

Ilya Spivak, head of global macroeconomics at Tatsi Life, said gold is currently moving in a narrow range, with focus shifting to US CPI data due on Thursday.

He added, “If the data shows that inflation has subsided, gold may exceed $1,900. However, it will be important to see if gold can get more momentum than that

Gold is considered a hedge against inflation, but it is very sensitive to raising interest rates, which increase the opportunity cost of possessing the precious metal that does not yield a return.

Federal Reserve official Michelle Baumann said on Tuesday that the central bank will have to raise interest rates again to combat rising inflation, and this will likely lead to more fragile labor market conditions.

As for other precious metals, silver increased in spot transactions by 1.2 percent, to $23.89 an ounce. Platinum rose 0.7 percent to $1,088.00 an ounce. Palladium fell 0.4 percent to $1,773.88 an ounce.