Investing.com – Gold prices surged above $1300 on Friday supported by a dip in the dollar following inflation data that fell short of expectations sparking uncertainty about the outlook for tighter monetary policy.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose $6.86, or 0.54%, to $1,303.40 a troy ounce.
Gold prices were on track to snap a four-week losing streak befitting from a weaker dollar and a dip in treasury yields amid data showing inflation remained subdued last month.
The Labor Department said on Friday its Consumer Price Index rose 0.5% last month after advancing 0.4% in August. That missed economists forecast of a 0.6% rise.
“The market is questioning the future rate increase amounts and thus the stage is being set up for a much larger gold rally in the months to year ahead.” said Peter Spina, president and chief executive officer of GoldSeek.com
Gold is sensitive to moves higher in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
Also supporting gold prices was an uptick in geopolitical uncertainty after North Korea issued fresh threats to attack the U.S. military base at Guam.
“We have already warned several times that we will take counteractions for self-defense, including a salvo of missiles into waters near the U.S. territory of Guam,” North Korean researcher, Kim Kwang-hak told the North’s official Korean Central News Agency on Friday.