Latest figures released by the U.S. Bureau of Statistics show that inflation increased by 3% over the last year, with the consumer price index also rising by 0.3% in September. This announcement saw the price of gold surge to $4,088.52 an ounce as many investors turned to the precious metal to hedge against rising inflation.
Northlight Asset Management’s Chief Investment Officer, Chris Zaccarelli, explains that while many investors had expected a huge increase inflation and prepared for this outcome, the market continues to pressure short sellers as it becomes clearer that the economy is more resilient than previously thought.
Zaccarelli notes that despite stock prices being high and the existence of risks in the market, expectations that the Federal Reserve will reduce interest rates and steady growth in corporate profits suggest that both the market and gold’s rallies are unlikely to lose momentum anytime soon. Additionally, he argued that while there’d probably be obstacles ahead next year, it was best not to fight the ongoing uptrend now.
FP Markets’ Chief Market Analyst, Aaron Hill, explained that the inflation report had an immediate effect on the currency and precious metals markets. He revealed that core consumer price index had eased to just 0.2% and gold’s appeal as a safe-haven asset continued to increase, noting that if momentum held, the precious metal’s price could hit $4260 an ounce.
He explained that in the same period, the greenback had seen its value drop by between 0.5-0.8% against its peers as more traders shifted to risk assets and investors reacted positively to the weaker inflation report.
U.S. inflation has created a complex environment for the gold market.
Persistently high consumer prices have prompted the Federal Reserve to maintain a steady monetary stance, leaving interest rates unchanged for most of this year, a move that raises the cost of holding non-yielding assets like gold. At the same time, elevated inflation has fueled concerns that the American economy could tip into recession, boosting gold’s appeal as a safe-haven asset.
Meanwhile, signs of a weakening job market have led many economists to anticipate another rate cut from the Federal Reserve this month despite stubborn inflation, as the central bank seeks to balance both sides of its dual mandate.
Looking ahead, analysts expect gold to remain sensitive to upcoming economic data, including the Fed’s policy meeting and future inflation prints. A confirmed rate cut could provide fresh momentum for the metal, while any signs of persistent inflation may trigger renewed volatility. Companies like Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) with interests in gold exploration will be watching these developments closely.
NOTE TO INVESTORS: The latest news and updates relating to Aston Bay Holdings Ltd. (TSX.V: BAY) (OTCQB: ATBHF) are available in the company’s newsroom at https://ibn.fm/ATBHF
About MiningNewsWire
MiningNewsWire (“MNW”) is a specialized communications platform with a focus on developments and opportunities in the Global Mining and Resources sectors. It is one of 70+ brands within the Dynamic Brand Portfolio @ IBN that delivers: (1) access to a vast network of wire solutions via InvestorWire to efficiently and effectively reach a myriad of target markets, demographics and diverse industries; (2) article and editorial syndication to 5,000+ outlets; (3) enhanced press release enhancement to ensure maximum impact; (4) social media distribution via IBN to millions of social media followers; and (5) a full array of tailored corporate communications solutions. With broad reach and a seasoned team of contributing journalists and writers, MNW is uniquely positioned to best serve private and public companies that want to reach a wide audience of investors, influencers, consumers, journalists and the general public. By cutting through the overload of information in today’s market, MNW brings its clients unparalleled recognition and brand awareness.
MNW is where breaking news, insightful content and actionable information converge.
To receive SMS alerts from MiningNewsWire, text “BigHole” to 888-902-4192 (U.S. Mobile Phones Only)
For more information, please visit https://www.MiningNewsWire.com
Please see full terms of use and disclaimers on the MiningNewsWire website applicable to all content provided by MNW, wherever published or re-published: https://www.MiningNewsWire.com/Disclaimer
MiningNewsWire
Los Angeles, CA
www.MiningNewsWire.com
310.299.1717 Office
Editor@MiningNewsWire.com
MiningNewsWire is powered by IBN
