PRECIOUS-Gold leaps to 5-month peak as strong U.S. inflation data boosts appeal

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* US consumer prices jump in October

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* Gold rebounds after inflation data

*Silver, Platinum also touched the highest level in many months

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Nov 10 (Businesshala) – Gold led a rally in the precious metals on Wednesday, rising 2% to a five-month high last month as U.S. consumer prices edged up bullion as an inflation hedge. Appeal burned.

As of 10:38 a.m. ET (1538 GMT), spot gold was up 1.4% to $1,857.30 an ounce, having previously hit a high since June 15 at $1,868.2.

US gold futures rose 1.7% to $1,861.60.

“Once again we have hot inflation data,” said David Meager, director of metals trading at High Ridge Futures. “While gold is the quintessential hedge against inflation, we believe inflation is the underlying positive environment that will fuel the rally of the gold market in the coming weeks and months.”

US consumer prices rose more than expected in October as the cost of gasoline and food rose, leading to the biggest annual gain since 1990.

“This environment is a double-edged sword because as the inflation data continues to warmer than expected, the concern will be whether the Federal Reserve depletes liquidity faster than expected,” Megar said.

On the gold side, spot silver rose 3.2% to $25.06, platinum jumped 2.7% to $1,087.10 and palladium rose 1.6% to $2,053.01.

The rally came despite the strengthening of the US dollar, which usually hinges on demand for the greenback-priced precious metals from holders of other currencies.

Safe-haven gold, on course for a fifth straight day of gains, was also supported by a slide in real yields on the US Treasury and overall risk-off sentiment pushing Wall Street’s main indexes down.

Standard Chartered analyst Suki Cooper says there is a key break above the key resistance level of $1,835 an ounce and a move towards $1,900 above the $1,851 level.

“Gold prices have a solid footing in view of the strong seasonally strong demand from India,” he added. (Reporting by Amy Caron Daniels and Bharat Govind Gautam in Bengaluru; Editing by Mark Potter and Aditya Soni)


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