Gold prices rising as inflation exceeds market expectations

*Experts say the precious metal, which last traded for over $1,741 an ounce, is ‘responding positively to the news, but short-term price movements in the metal are not an indication of long-term trends’

Isola Moses | ConsumerConnect

Precious metal gold prices rose Tuesday, April 13 in response to government data showing a slightly higher-than-expected reading on US inflation.

The market reading “came in slightly over expectations, an indication that the US economy is heating up a bit more than expected,” Jason Teed, co-portfolio manager of the Gold Bullion Strategy Fund told MarketWatch.

It gathered the Consumer Price Index (CPI) also increased 0.6 percent March 2021 after a 0.4 percent rise in February, according to the data.

Subsequently, economists were expecting to see a 0.5 percent increase in the CPI, report said.

The US Labour Department report as well stated “the March 1-month increase was the largest rise since a 0.6-percent increase in August 2012.”

June gold futures rose $8.50 at $1,741.20 an ounce, up 0.50 percent on the day.

Generally, Teed said the precious metal is “responding positively to the news, but short-term price movements in the metal are not an indication of long-term trends.”

Federal Reserve Chairman Jerome Powell during an interview on CBS News “60 Minutes” last Sunday submitted that the economy is at an “inflection point” right now. Barring another wave of COVID-19 cases, Powell the economy is heading towards recovery from the disruptive Coronavirus (COVID-19) pandemic.

Market analysts have stated that the risk of higher inflation could prompt the Central Bank to hike interest rates sooner than expected.

However, economists say last year’s COVID-19-related disruptions are likely to impact annual forecasts, report noted.