Home > Weekly review: US inflation pace pricks 30-year high, gold and bitcoin retreat

Weekly review: US inflation pace pricks 30-year high, gold and bitcoin retreat

Highlights

  • US Consumer prices rose the highest year over year since 1990

  • Gold reached a 6-month peak as Bitcoin topped $69,000 before retreating

  • Dollar hits the highest level since June

US consumer prices spike to 30-year highs

US consumer price index (CPI) climbed by 6.2% over last October, spiking to levels last seen on 1990 to throw a spanner into inflation predictions and economic recovery plans.   

The data, released on Wednesday, showed consumer prices spiked by 0.9% in October, up from 0.4% in September, with cumulative year-over-year inflation rising the fastest it has ever done since December 1990.

The Federal Reserve could now look to revise its stance on interest hikes, with the market betting on a potential move coming as early as December this year.

Financial analyst Jeremy Siegel said the CPI data presented a “troublesome” scenario, telling CNBC:

 “Listen, stocks love inflation until the Fed gets serious about it and they have not been serious about it.”

Siegel thinks Fed Chair Jerome Powell will take a more serious approach to the inflation issue if the next consumer data report proves anything like the recently released one.

In the short term, markets are likely to swing on further inflation readings across the globe as well as sentiments from policymakers in the US and Europe.

Dollar gains against peers amid inflation fears

The dollar is on track to end the week strongly for the first time since June as the market bid for an earlier than expected move of hiking interest rates by the Federal Reserve. As noted above, this comes after the US experienced its biggest inflation jump in three decades.

The dollar gained against the yen and euro on Friday, rising to highs of 114.265 against the yen and $1.1439 against the euro.  The dollar also gained against the Swiss franc and the Sterling pound, with impact initially felt across the commodities market as Copper prices dropped early morning on Friday.

Gold sees 5-month peak as Bitcoin snaps $69k

Gold traded to its highest price level in five months, peaking above $1,860 per ounce as investors rushed into safe-haven assets amid inflation concerns across the global markets. Gold has pared some of the gains on Friday, losing  0.46%, or $8, in the past 24 hours to currently change hands around $1,852.58 per ounce.

In cryptocurrencies, Bitcoin rose to an all-time high above $69,000 on the back of strong institutional inflows. Ether, the native cryptocurrency on the Ethereum network, rose above $4,800. Like gold, the two crypto assets have pared the gains but remain bullish as the market eyes a fresh leg up in a historically positive 4th quarter. 

Bitcoin is at $64,104 while ETH is trading around $4,674.

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