Gold Prices Down Nearly 1% Following Hotter-Than-Expected PPI
(Kitco News)- Goldprices remain under pressure, and are trading at session lows after producerprice inflation came in much hotter than expected last month.
Friday,the U.S. Labor Department said its Producer Price Index (PPI) rose 0.6% in Octoberfollowing an increase of 0.2% in September; the data was stronger than expectedwith economists' forecasting an increase of 0.2%.
CorePPI, which strips out volatile food and energy costs, also rose more thanexpected with a 0.5% reading in the last month, following a 0.2% increase in September.Economists were expecting to see an increase of 0.2%.
Goldprices were under pressure ahead of the data and lost further ground followingthe wholesale inflation data. December gold futures last traded at $1,213.10 anounce, down nearly 1% on the day.
Whileinflation numbers are bullish for gold, analysts have said that the preciousmetal could suffer in the near-term as the data support further interest ratehikes, which is bullish for the U.S. dollar.
Economists pay close attention to producer prices as it is a leading indicator for consumer prices. Companies pass on higher costs to their customers. Economists note that the stronger than expected PPI data raises the upside risk to consumer inflation pressures.
By Neils ChristensenFor Kitco News
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