Precious Metals Preview: COMEX Gold Races Above $1800 Per Ounce, Inflationary Worries Boost Sentiments

Precious Metals Preview: COMEX Gold Races Above $1800 Per Ounce, Inflationary Worries Boost Sentiments

May 07, 2021 08:05 IST capital market

COMEX Gold futures raced higher in last session as an all pervasive rally in commodities boosted the yellow metal amid a tepid movement in the US dollar index and continued buying support after the metal broke above the critical $18 per ounce mark. Global gold ETFs lost 18.3 tonnes in April, marking outflows for five of the past six months. However, global outflows slowed significantly, as European funds added assets for the first time since January. COMEX Gold futures added nearly 2% to hit a two and half month high near $1820 per ounce. MCX Gold futures also jumped well above Rs 47000 per 10 grams mark and hit above Rs 47600 level, rallying in excess of 1%. Gold seemed to benefit from calls of an inflationary spiral as more evidence emerged on the front of soaring material prices. The FAO Food Price Index (FFPI) averaged 120.9 points in April 2021, 2.0 points (1.7%) higher than in March and as much as 28.4 points (30.8 percent) above the same period last year. The increase marked the eleventh consecutive monthly rise in the value of the FFPI to its highest level since May 2014. Industrial commodities are already around decade highs and the continued surge in food prices could keep global inflationary expectations higher in coming months.

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