Investing.com | Jan 12, 2018 17:39
Investing.com – Gold prices rose to four month highs shrugging off renewed signs of US inflationary pressure as dollar fell to lows amid euro and sterling pressure.
Gold futures for February delivery on the Comex division of the New York Mercantile Exchange rose by $11.20, or 0.85%, to $1,333.70 a troy ounce.
The euro and sterling rallied against the dollar, supporting dollar-denominated gold, as traders cheered easing political uncertainty in both the UK and Eurozone.
Dollar-denominated assets such as gold are sensitive to moves in the dollar – A falling dollar makes gold cheaper for holders of foreign currency and thus, increases demand.
Chancellor Angela Merkel struck a deal with the Social Democrat Party (SPD) on Friday, paving the way for government coalition talks. While in the UK reports that several EU member countries are open to the idea of a softer brexit lessened investor worries of the EU adopting a tough stance on trade discussion with Britain.
Gold prices were on track extend their four-week rally despite signs of renewed inflation which may strengthened the Federal Reserve’s case for tightening monetary policy.
The Labor Department said on Friday its core Consumer Price index rose 0.3% in December, edging up 0.2% in November. The uptick in consumer prices in year-on-year through December rose to 2.1%.
Wells Fargo said the upbeat CPI data should help to allay some FOMC members' fears that “inflation is stuck at undesirably low levels.”
Written By: Investing.com
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