Gold Rises on US Inflation Concerns

BUSINESS TURKMENISTAN
Gold Rises on US Inflation Concerns
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. (Photo: Bloomberg)

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.