Inflation has been the most important driver of the gold rates in 2021. A surging inflation rate and pandemic forced gold rates much higher in the recent period. Only in the last month, in December 2021, the gold rate had lost its pace. But after the latest publication of US and UK inflation data, the yellow metal is trying to cross its limits, and estimates.
According to the latest report, the UK inflation surged 30-year high range. The country's consumer price index (CPI) surged to 5.4% (YoY) in December 2021, the data says. Additionally, the US retail inflation was at the 40-years high level in the same period, at 7%. Today, the Comex gold February futures rates, rallied above 1.58%. the metal has started to break the ice after a 2-months log bearish note. Standing still as the hedge against inflation, gold is the preferred metal for investors now. However, if the US Fed hikes the interest rate to control inflation, the situation might change.
The US dollar index today stood weak as the economic developments are impressive. But, the US Treasury 10-years yield fetched around 1.89%, and the US 2-years yield went above 1.0%. Although the bond yield is fetching good returns, the high inflation rate is concerning investors to keep faith in the assets. Oil prices too are rising for the same cause. Investors are now waiting for the US economic data, which is going to be published on Wednesday. This data will again create another roadmap for the yellow metal.
According to analysts' latest estimates, the bulls' next upside price objective for gold is $1,850/oz in February futures, and bears' next near-term downside price objective is $1,781.30/oz. In India, gold prices gained marginally. Both 22 carat and 24 carat gold rates gained by Rs. 70/10 grams today, and quote at Rs. 47160, and Rs. 49160/10 grams, respectively.
The Comex gold futures gained significantly by 1.58% and were quoted at $1841.1/oz, till last traded. On the earlier day, Comex gold futures closed at $1812.4/oz. The spot gold prices were quoted at $1843.90/oz, gained by 1.62%, till last traded. The US dollar index in the spot market stood at 95.52, falling by 0.21%. Similarly, in India, the MCX gold in February future quoted at Rs. 48,390/10 grams, surged by 0.97%, till last traded.