Gold soared by 1 percent on Wednesday, February 14, rebounding from losses made in the wake of stronger
than expected U.S. inflation data, as the dollar surrendered gains and stock markets swung higher.
Spot gold was up 1.4 percent at $1,347.91 an ounce by 1542 GMT, off an earlier low of $1,319.35. U.S. gold futures for April delivery were up $20 at $1,350.40.
“That inflation scare could be something that really plays into gold’s more bullish sentiment — if the Fed stays behind the curve, inflation could become problematic and gold could be a good hedge against that,” said Societe Generale analyst Robin Bhar.
“The monetary authorities want stability,” he said. “It ould delay monetary tightening if this correction turns into a bear trend in stock markets. That would make them cautious, and maybe that’s what the market’s looking at.”
U.S. stocks fell on Wednesday in the immediate wake of theinflation report, which fanned fears of faster interest rate increases, and after U.S. retail sales posted their biggest decline in 11 months. Gold also slid as investors fleeing falling stock markets opted for the dollar as an alternative.
The metal has since recovered as the dollar surrendered gains. The world’s largest gold-backed exchange-traded fund, SPDR Gold Shares , reported an inflow of nearly 3 tonnes on Tuesday after the biggest weekly drop in holdings since July 30.
Among other precious metals, silver was up 1.5 percent at $16.79 an ounce, palladium gained 1.5 percent
to $999.60 and platinum was up 1.7 percent at $993.
The platinum market is set for another surplus this year after recording oversupply of 110,000 ounces in 2017, Johnson Matthey said in a report on Wednesday, though sister metal palladium is tipped for another deficit.
