The price of gold rose to its highest level in more than three months on Monday following a US inflation concerns that increased stock market volatility last week and resurgence of COVID-19 cases in different parts of Asia.
Gold, which was worth more than $2,000 an ounce (around 28 grams) last summer before falling back after the major drugmakers announced effective COVID-19 vaccines in November, rose 0.7% to $1,854 an ounce, its highest level since February 2 this year, The Financial Times reports.
The yellow metal’s price rises in times of heightened uncertainty on stock markets and is often bought by investors as a hedge against inflation.
Global stocks experienced decline last week after data showed US consumer price inflation rose 4.2% in April, year on year, its highest since 2008. The sustained inflation erodes the real returns from stocks and bonds and investors are currently unsure whether April’s inflation rise was a result of one-off effects from industry shutdowns last year caused by coronavirus, according to the report.
Taiwan, which has been one of the most successful in the world at containing COVID-19, announced 335 new cases of the virus on Monday and introduced strict new social distancing measures. Singapore reported 49 new COVID-19 infections and announced school closures while Trinidad and Tobago introduced restrictions as it battles its third wave of the pandemic.