Gold Jumps to 1-week High as US Inflation Drops to 1.4%

Gold prices jumped to a one-week high above $1854 an ounce on Wednesday after new US data reported that inflation slowed to 1.4% in January.

The metal prices continued to rise, supported by hopes of the US Congress approving a huge stimulus package of about $1.9 trillion.

Economic data revealed a rise in consumer inflation in the US over the past month. Investors will be awaiting Fed Chairman's speech at a hypothetical New York Economic Club event later in the day.

Upon settlement, the price of gold futures contracts for April delivery rose 0.3% to reach $ 1842.70 an ounce. By the end of trading, the spot price of the yellow metal increased 0.3% to $1,843 an ounce.

During the same period, the main dollar index, which measures the currency’s performance against 6 major currencies, dropped 0.1% to 90.35.

Inflation expectations in the US Treasury market settled above 2.2% for the next decade, the highest level since August 2014, while global stock markets extended gains for the eighth session in a row.

Chinese financial markets now closed to mark the Lunar New Year of the Taurus holiday until Thursday next week, which will push gold prices even further.

Meanwhile, Shanghai gold prices ended the weary year of the rat with a premium of $8 an ounce against London prices, stimulating new imports and showing a strong balance of supply demand in the number one gold consumer market for the precious metal every week, before the peak of gold in China.