Gold News

US inflation data heightens appeal of Gold Investment

Gold Investment could be boosted after inflation expectations continued to rise faster than expected in the US during June.

New figures released on Wednesday (July 15th) revealed that the US labor department's consumer prices index, an inflation yardstick, rose by 0.7 percent during the month.

Furthermore, the gap between the yields on ten-year US government notes and ten-year Treasury inflation-protected securities - viewed as a long-term inflation benchmark - is up to 1.68 percent.

Investors generally tend to Buy Gold as a hedge against inflation and the sentiment towards the yellow metal could also be improved by data suggesting that manufacturing deterioration in New York has effectively ended.

George Goncalves, head of fixed income rates strategy at global financial services firm Cantor Fitzgerald, told Reuters: "These are backward-looking numbers. Most of it came from energy and they proved to be a transient factor."

Meanwhile, Trevor Keeley explained last week that China's decision to increase its gold reserves could lead other countries around the world to follow suit, the Financial Times reports.

The Chinese government revealed recently that it has increased its holdings of the yellow metal by 450 tonnes since 2003 and Mr. Keeley expects nations to "take heed" of this move.

"Gold is shifting back from a sovereign reserve asset central banks were inclined to underplay to one of growing, strategic interest," he told the newspaper.

"This shift is logical; gold remains the world's primary financial asset that is no one's liability."

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