Gold gains as seek haven amid inflation surge

Gold rose to the highest in a month as investors sought haven amid stubbornly high inflation and the looming reduction in stimulus.

Real interest rates fell and that supported gold. There is a rising perception in the market that inflation could stay elevated for longer.

The U.S. consumer price index data paves the way ahead for a faster pace of growth and underscoring the persistence of inflationary pressures in the economy.

The yield on 10-year Treasuries fell after an initial increase following the data released Wednesday, boosting demand and appetite for non-interest bearing gold bars.

China’s factory gate prices grew at the fastest pace in almost 26 years in September, adding to global inflation risks, and that was good news for gold prices.

Meanwhile, minutes of last month’s Federal Reserve meeting showed that officials broadly agreed they should start tapering bond purchases in mid-November or mid-December amid increasing concern about inflation.

Gold added 0.2% to settle at $1,795.87 per ounce at 5 p.m. in New York, its highest close in four weeks. The Bloomberg Dollar Spot Index fell 0.1% after dropping 0.5% in the previous session.