Gold ends higher, booking best day in over a week, after key inflation reading for April comes in hotter than expected

Gold futures closed higher on Wednesday, rebounding after the three-month low end as traders digested a reading of inflation that was higher than expected.

Gold for June delivery GC00,
+ 0.60%

+ 0.60%
rose $ 12.70, or 0.7 percent, to $ 1,853.70 an ounce at Comex, with its best daily percentage increase for the most active contract since April 29, according to Dow Jones Market Data. The rebound came a day after it ended at its lowest level since Feb. 10.

July silver SIN22,
+ 0.63%
rose 15 cents, or 0.7 percent, to close at $ 21,575 an ounce, a day after it ended at its lowest level since July 20, 2020.

The April consumer price index showed inflation at an annual rate of 8.3%, down from 8.6% the previous month, according to government data. It marked the first time in five months that the index has not picked up the fastest pace in 40 years, while also highlighting the pain that American households will likely feel for some time due to price pressures.

Basic prices, which exclude food and energy, rose 0.6%, more than a 0.3% advance in March, and Wall Street was disappointed.

“Today’s inflation report shows Fed Chairman Powell made a mistake last week when he ruled out the option of a 75 basis point rate hike at the next policy meeting.” , wrote Edward Moya, senior market analyst at Oanda, in a note. “The overall conclusion for much of Wall Street, however, is that the Fed is still prepared to offer consecutive half-point rate hikes at the June and July FOMC meetings.”

reads: Why inflation data was not a “turning point” for stock market investors

Gold has come under pressure as the US dollar has recovered strongly against its main rivals. A rise in the ICE US Dollar DXY Index,
fell on Wednesday after trading near a 20-year high. A stronger dollar can be a burden on commodities priced in the currency, as it makes them more expensive for users of other currencies.

Rising Treasury yields, which have retreated this week from a 3-and-a-half-year high, could also be a headwind for gold. Higher yields increase the opportunity cost of having unprofitable assets.

“Gold and silver prices fell slightly from their moderate gains observed just before the CPI report was released,” Jim Wyckoff, a senior analyst at, wrote in a note. “The data falls into the realm of US monetary policy hawks, who want to see a more aggressive pace of US Federal Reserve interest rate hikes.”

With “the turmoil and uncertainty in the markets,” the dollar and non-gold and copper commodities have maintained a positive trend, BofA Global researchers wrote in a note to the customer on Wednesday. “The gold trend now remains neutral after being positive for most of the year.”

July copper HGN22,
+ 1.28%
rose 1.3% to $ 4,209 a pound.

platinum July 22 PLN,
+ 4.43%
gained 4.5% to finish at $ 989.80 an ounce, while the June palladium PAM22,
lost 1.8% to finish at $ 2,007.90 an ounce.

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