XAU/USD: Gold Jumps 1.5% After Inflation Comes In Slightly Hotter Than Expected

Precious metal surged to levels near $2,650 per ounce following September’s consumer price report. Record isn’t far away.

• Gold prices XAUUSD turned up early Friday, extending gains from Thursday when investors digested a hotter-than-expected inflation report. The precious metal is higher by 1.5%, gravitating toward $2,650 per ounce with gold bulls charging toward the ultimate record high of just under $2,700 per ounce. The latest leg up was mostly based on looming uncertainty in the aftermath of the inflation data release.
• For September, consumer prices, as measured by the CPI index, rose 2.4% on an annualized basis, beating expectations for a 2.3% increase. While price growth did shrink from the 2.5% clip the month before, price pressures revitalized and put investors on the defensive. Hence the rush to safe-haven assets with gold demand picking up. The US dollar pulled back after an initial sprint, and so did treasury yields.
• What’s the bigger picture? This year’s flurry of market-moving events have propelled gold to unseen heights. Geopolitical tensions and fears that a surprise escalation in the Middle East conflict might dent the global economy are keeping investors on edge, ready to hit the ‘Buy’ button and pull in more of the shiny stuff. With the fresh upside swing, gold snapped a six-day losing streak.