Dubai: Gold prices jump to 5-month high; 24K sells at Dh224

Gold prices rose on Thursday morning after a surge in US consumer prices drove the metal to a five-month high on Wednesday evening.

US consumer prices accelerated in October as Americans paid more for petrol and food, leading to the biggest annual gain in 31 years, more signs that inflation could stay uncomfortably high well into 2022 amid snarled global supply chains. Gold is seen as a hedge against rising price levels.

Spot gold was slightly up at $1,850.92 at 9.20 am UAE time on Thursday morning. The precious metal high the highest level since June 15 after the US announced CPI data on Wednesday evening.

In the UAE, 24K was trading at Dh224.0 per gram on Thursday morning as compared to Dh221.25 on Wednesday morning.

While 22K, 21K and 18K were selling at Dh210.5, Dh200.75 and Dh172.25 per gram, respectively, on Thursday morning.

“For gold, which is a perfect inflation hedge, we see massive upward moves. Basically, gold is on fire and so is Bitcoin, which is also an inflation hedge. This is despite the fact that the dollar index is up as traders believe that the Fed is behind the curve and they need to do something to control the pace of inflation,” said Naeem Aslam, chief market analyst at London-based AVA Trade.

Craig Erlam, senior market analyst, UK and EMEA, Oanda, said with gold prices soaring as investors seek inflation hedges, it's clear the Fed has some questions to answer. “The markets and the central bank are not on the same page.”

waheedabbas@khaleejtimes.com

• Dubai