Gold futures rose Wednesday and platinum futures were headed for the highest level in about six years as investors assessed the prospects for precious and industrial metals amid a recovery from the COVID-19 pandemic.
Data on U.S. inflation showed that consumer prices rose moderately in January, up 0.3%, matching economists’ consensus estimates after climbing 0.4% in December, suggesting that underlying inflation was tepid. The reading points to an annualized CPI reading of 1.4%, compared against 1.5% expected.
However, many investors remain fearful that U.S. government spending and accommodative monetary policies will ultimately lead to a surge in pricing pressures, which could help to lift gold, which is often viewed as a hedge against inflation.
“Inflation isn’t showing up in the Consumer Price Index because a large driver of the index is housing rent in cities, which has declined recently as many people leave cities in favor of suburbs because of the pandemic,” wrote Nancy Davis, founder of Quadratic Capital Management in emailed comments.
“There are plenty of inflationary areas of our economy right now, such as food, energy, electronics and autos,” the asset manager wrote.
Gold for April delivery rose $14.10, or 0.8%, to $1,851.60 an ounce, after marking on Tuesday the highest settlement for the most-active contract finish since Feb. 1, FactSet data show.
Meanwhile, platinum prices for March delivery were rising $58.20, or near 5%, to $1,252.60 an ounce, driving to its highest trade since around 2014, as investors look toward tighter vehicle emission rules as a catalyst for the commodity.
Separately, March silver was edging up 8 cents, or 0.3%, at $27.50 an ounce, after it slipped 0.6% on Tuesday.
Looking ahead, Federal Reserve Chairman Jerome Powell is slated to deliver remarks to the Economic Club of New York at 2 p.m. Eastern, which could spark moves in financial markets.
Powell’s comments would come as the U.S. dollar has been softening and bond yields have been perking up.