Gold prices rally as traders await US inflation data

Gold bars

Gold prices rebounded today, Nov. 13, as investors snapped up deals after the yellow metal's negative performance following the US presidential elections, with all eyes on US inflation data scheduled for release later in the day.

Gold futures prices for December delivery increased 0.25%, or $6.50, to $2,612.80 an ounce at 11:03 am Makkah time, with spot prices also up 0.27% to $2,605.46 per ounce.

Likewise, silver contracts for December delivery climbed by 0.80% to $31 an ounce, in tandem with a 0.27% hike in platinum spot prices to $951.30 per ounce.

The yellow metal fell below $2,600 an ounce during yesterday's trading, following a wave of negative performance in the post-US election period, which prompted investors to opt for deals in light of the bullion price decline.

At the same time, investors fear that the policies of the incoming US President Donald Trump will exacerbate the country's fiscal deficit, reignite inflation, and thus undermine the Federal Reserve's efforts to cut interest rates.

Although gold is meant to hedge against inflation, higher interest rates raise the opportunity cost of holding an asset that does not generate a return on its own.

Investors are awaiting the release of the annual reading of consumer price inflation in the United States today, which is projected to accelerate to 2.6% in October from 2.4% in September.

This comes a day before the release of producer price inflation data, weekly claims for unemployment benefits, in addition to a speech by Federal Reserve Chairman Jerome Powell during a panel discussion, titled "Global Outlook", hosted by the Federal Reserve in Dallas.