Producers of metals and other raw materials rose after strong inflation data.
Gold futures rose 2% and posted the largest gain in two days since May after the Labor Department reported that consumer price inflation rose at its fastest pace in more than a decade in September.
However, according to Wall Street strategists, the materials sector as a whole does not always do well during periods of rising consumer inflation. On the one hand, miners benefit from higher raw material prices. But the side effects of inflation could slow global growth and drain demand for copper and other industrial metals.
“Food and energy prices are not going to come down anytime soon,” said Edward Moya, senior market analyst at foreign exchange brokerage OANDA Group. “And it really does affect the outlook, especially with the labor market recovery still not going very smoothly.”
Write to Rob Curran at [email protected]
(END) Dow Jones Newswires
Oct 13, 2021 5:06 PM ET (9:06 PM GMT)
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