Gold Up, Hits One Week High as Inflation Worries Persist

Gold was up on Monday morning in Asia, hitting a more than one-week high. Inflationary pressures helped counter the impact of a U.S. Treasury yield rally after better-than-expected U.S. employment data.

Gold futures edged up 0.18% to $1,811.05 by 12:08 AM ET (5:08 AM GMT) after hitting the $1,814.91 mark, its highest since Jan. 27, earlier in the session.

“The largest component of inflation currently, beyond the supply chain issues, is oil prices. And this is a problem no matter how high you move interest rates,” SPI Asset Management managing partner Stephen Innes told Reuters.

“Gold is getting a little bit defensive, realizing that we could be in this state for hyperinflation.”

Meanwhile, Asia Pacific shares were mostly down on Monday, with a strong U.S. jobs report calming dears about the global economic recovery from COVID-19. Benchmark 10-year U.S. Treasuries were at their highest levels since December 2019 on Friday.

The report showed that non-farm payrolls were at 467,000 in January, while the unemployment rate was 4%. Investors now await U.S. inflation data, including the consumer price index, with strong data likely to increase bet that the U.S. Federal Reserve will begin hiking interest rates.

In Asia Pacific, Chinese data released earlier in the day showed that the Caixin services purchasing managers index was 51.4 in January. Australia also released retail sales figures.

Meanwhile, geopolitical tensions in Eastern Europe also supported the safe-haven yellow metal. The U.S. and Russia continue to clash over Ukraine, with two U.S. officials warning on Saturday Russia had in place about 70% of the combat power it could need to invade Ukraine.

In other precious metals, silver jumped 1.2% and palladium rose 0.7%, while platinum was steady at $1,024.44.