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Metals Stocks: Gold eyes a 4th straight session gain and highest finish in a month

Gold futures nudged higher early Tuesday as investors awaited data that’s expected to show surging U.S. inflation ran at an even hotter pace in March.

Gold for June delivery
GC00,
+0.79%

GCM22,
+0.79%

rose $11.50, or 0.6%, to $1,959.70 an ounce on Comex after eking out a third straight gain on Monday. May silver
SIK22,
+0.89%

rose 14.8 cents, or 0.6%, to $25.135 an ounce.

Gold has gained ground even as U.S. Treasury yields continue to rise, with the 10-year yield trading near a 2.8% for the first time since January 2019. Rising yields raise the opportunity cost of holding nonyielding assets like gold.

The U.S. March consumer-price index, or CPI, reading is due at 8:30 a.m. ET. Economists surveyed by The Wall Street Journal expect the data to show a 1.1% monthly rise, which would put the year-over-year rate at 8.4%, up from 7.9% in February.

Core CPI, which strips out volatile food and energy costs, is expected to show a 0.5% monthly rise and a 6.6% year-over-year increase after a 6.4% increase in February.

“Hotter than expected inflation would likely provide some additional buoyancy for gold but may also intensify the Fed’s already hawkish tenor,” said Peter Grant, senior metals strategist at Zaner Metals and Tornado Precious Metals Solutions, in a note.

“Real rates based on 10-year TIPs (Treasaury inflation-protected securities) are approaching 0% for the first time since early in the pandemic,” he said. “The sharp rise in real rates threatens to further undermine risks assets, including stocks and cryptocurrencies. If stocks go back on the defensive, gold may benefit from haven flows.”

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