Gold Futures became highly attractive for investors and touched their highest in three days. The surge was in reaction to news that US core consumer prices increased with higher pace in the month of May since last three years. According to US Bureau of Labor Statistics core inflation excluding energy and food costs increased by 0.3 percent in the Month of May as compared to increase of 0.2 percent in the Month of April. The increase is the highest since July 2008.

Consumer prices including energy and food cost surged 0.2 percent in the month of May as compared to 0.4 percent in the month of April.

Gold futures contract for August delivery gained 0.5 percent to 1,533.25 per ounce at Comex trading session of New York Mercantile Exchange.

Gold is a precious metal which is directly correlated with inflation and investors invest in gold as part of their hedge strategy against the rising inflation.

Considering the rate of inflation analysts from BNP Paribas are now expecting gold price to surge up to $1,600 per ounce by 2012.

Another factor that contributed to appreciation of gold prices was stronger dollar. The dollar index DXY which measures the US dollar’s performance versus its six major rival currencies surged 0.93 percent to 75.50 on Wednesday.

Among other base metals, silver futures contract for July delivery gained 0.35 percent to $35.56 per ounce whereas Copper futures contract for July delivery slipped 0.23 percent to $4.148 per pound.