Gold is a traditional hedge against inflation for investors but in China surging bullion prices are having the opposite effect, providing a temporary respite from deflationary pressures.
Core inflation last month saw its fastest increase in almost two years, unexpectedly helping the broader consumer-price index end a stretch of three months at or below zero. The precious metal in October contributed close to half or more of the 1.2% jump in the core index, which excludes food and energy, according to estimates from Goldman Sachs Group Inc. and Shenwan Hongyuan Group Co.