Gold regains its inflation hedge glory

Gold regained its title as an inflation hedge this week as concerning Chinese and U.S inflation data sent investors flocking back to the yellow safe haven, pushing the spot price up to $1860/oz. levels.

U.S. Labor Department released inflation data on Wednesday that showed U.S. Consumer prices jumping 6.2% in October, the biggest inflation surge since December 1990. On a monthly basis, the CPI increased by 0.9% against the 0.6% estimate.

China's factory-gate data were also released this week. The data showed that prices grew at the fastest pace in 26 years in October as coal prices soared amid a power crunch in the country's industrial zones. The annual inflation rate rose sharply to 1.5% in October 2021 from 0.7% a month earlier, higher than the market consensus of 1.4% and highest since September 2020.

The two powerhouses' worrisome data gave Gold ETFs a push with SPDR Gold Shares and iShares Gold Trust gaining more than 1.5% in the last couple of days. Same for Gold Miners ETFs with VanEck Vectors Gold Miners ETF, VanEck Vectors Junior Gold Miners ETF, and iShares MSCI Global Gold Miners ETF inching 4.14%, 4.22%, and 5.05% respectively during the same period.

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