Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinGold surged another 1% to close above $1,848, the highest level in nearly five months, as sharply higher consumer prices stoked demand for inflation hedges. It was the metal's fifth straight winning session.

The cost of living jumped to a 31-year high as the consumer price index rose another 0.9% in October behind rocketing food, housing, and energy prices. The 12-month inflation rate leapt to 6.2%, more than three times the Fed's target 2% and the highest since 1990.

Coming one day after wholesale inflation jumped to an annualized 8.6%, also the highest in decades, the higher-than-expected CPI print suggests the Fed is behind the curve on controlling inflation after insisting for months that higher prices are merely transitory.

Gold is often seen by investors as the quintessential hedge against loss of purchasing power, all the more attractive when near-zero interest rates make holding cash and even Treasury bonds a losing proposition.

US stock markets pulled back as traders worry that raging inflation will induce the Fed to accelerate its withdrawal of life-support for the economy The Dow and S&P 500 slid 0.7% and 0.8%, respectively, while the Nasdaq dropped 1.7%. Weaker equities support gold as a safe-haven asset.

Capping gold's gains, the dollar climbed nearly 1% after the CPI report on speculation that the Fed will have to raise interest rates sooner than expected. Typically, a rising dollar weighs on gold by making it pricier overseas.

The other precious metals were also higher, with silver adding 1.9% while platinum and palladium picked up 1.5% and 0.8%, respectively.

At the Comex close: December gold surged $17.50 to $1,848.30; December rose 45 cents to $24.77; January platinum picked up $15.60 to $1,077; and December palladium added $16.80 to $2,038.90 an ounce.