Inflation Surge Pushes Gold to Five-Month High

This article from Wall Street Journal is written by Hardika Singh

A three-decade high in inflation has broken gold from its long 2021 rut, a sign investors are seeking greater protection from the prospect of lingering consumer-price increases.

Most-actively-traded gold futures just notched their best week in six months, rising 2.9% to $1,868.50 a troy ounce after data showed persistent supply shortages and strong consumer demand lifting prices at the fastest 12-month pace since 1990. That data spurred bets that inflation could linger longer than Federal Reserve officials expect, driving gains in assets including Treasury inflation-protected securities and gold.

The haven metal’s surge carried it to a five-month high, ending months of sideways trading, which some analysts had taken as a sign of Wall Street sanguinity about inflation. Investors prize gold for its history as a store of value, so its stability suggested they didn’t expect inflation to erode returns in other assets.

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