Jan. 16 (Bloomberg) -- Gold advanced for the first time in three days after a government report showed the cost of living in the U.S. increased by the most in six months, boosting the appeal of the precious metal as a hedge against inflation.
The consumer-price index rose 0.3 percent in December, the most since June, following no change the prior month, a Labor Department report showed. Gold slumped 28 percent last year after some investors lost faith in the metal as store of value and consumer costs climbed 1.5 percent in 2013, the smallest calendar-year gain since 2010.
“Inflation is back on everyone’s radar,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “The safe-haven appeal is back to an extent.”
Gold futures for February delivery rose 0.2 percent to settle at $1,240.20 an ounce at 1:45 p.m. on the Comex in New York. Prices fell 1 percent in the previous two sessions.
Bullion, which slid to the lowest since June on Dec. 31, rallied to a one-month high of $1,255.30 on Jan. 13 on signs of increased demand in China. The Asian nation probably overtook India as the largest user last year. The Shanghai Gold Exchange delivered 2,197 metric tons to buyers in 2013, compared with 1,139 tons in 2012, the bourse said in a report.
Silver futures for March delivery fell 0.4 percent to $20.054 an ounce.
On the New York Mercantile Exchange, palladium futures for March delivery declined less than 0.1 percent to $743.90 an ounce. Platinum futures for April delivery advanced 0.2 percent to $1,431.50 an ounce.
--With assistance from Glenys Sim in Singapore. Editors: Millie Munshi, Joe Richter