Gold prices, US stocks rise sharply thanks to cooling inflation

Gold rose nearly $20 an ounce, while US stocks posted their best session since April after US inflation data.

At the end of the trading session on November 14, the world spot gold price increased by 17 USD to 1,962 USD per ounce. During the session, the price reached 1,970 USD at one point.

Prices accelerated as soon as the US session began on the evening of November 14, after the US Department of Labor released data showing that the country's inflation continued to cool down in October. The US consumer price index (CPI) increased by only 3.2% compared to the same period last year, lower than forecast and slower than September.

The data further reinforced investors’ expectations that the US Federal Reserve (Fed) has completed its interest rate hike campaign. The market now places a 100% chance that the Fed will keep its policy unchanged at its December meeting, compared to an 86% chance previously.

World gold prices increased in the session of November 14.

"The lower-than-expected CPI figures have supported gold prices. We expect inflation to cool further in Q4. This will weaken the USD and push gold prices higher. Over the next six months, we see prices heading towards $2,100," said Daniel Ghali, commodity strategist at TD Securities.

The Dollar Index, which measures the greenback’s strength against a basket of major currencies, fell 1% on November 14. The yield on the 10-year US Treasury note also fell to its lowest in more than a month after the inflation data.

On the US stock market, major indexes also rose sharply yesterday. The DJIA closed up 490 points, or 1.4%. The S&P 500 rose 1.9% and the Nasdaq Composite rose 2.4%. Both recorded their best session since April 2023.

"The market is optimistic that inflation has cooled enough that the Fed can put the brakes on tightening," said Keith Buchanan, chief investment officer at Globalt Investments.

Shares of banks like Bank of America and Wells Fargo soared yesterday on hopes the economy will avoid a recession. Electric carmaker Tesla closed up 6%. Energy companies Enphase Energy, SolarEdge Technologies and real estate company Boston Properties all recorded gains of more than 10%.

Ha Thu (according to Reuters, CNBC)

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