Gold Price Up Following Slightly Stronger PPI Data
(Kitco News) - The gold prices are modestly higher following weaker than expected retail sales and slightly stronger than expected pipeline inflation pressures.
Wednesday, the Labor Department said its Producer Price Index (PPI) rose 0.2% last month following an increase of 0.4% in January. According to consensus forecasts, economists were expecting to an increase of 0.1%.
Core inflation, which strips out volatile food and energy prices, was up 0.2% in February, following a 0.4% rise in January. Economists were expecting to see a modest increase of 0.2%.
Market participants pay close attention to the PPI as a gauge for inflation at the wholesale level. The report is seen as a leading indicator because traditionally, producers pass on higher prices to their customers. The data comes a day after the Labor Department reported tame inflation pressures in its Consumer Price Index.
Comex April gold was $1.40 higher to $1,328.50 an ounce as of 8:32 a.m. EDT. Three minutes prior to reports on retail sales and the Producer Price Index, the metal had been at $1,326.10 an ounce.
According to some economists, muted inflation will keep the Federal Reserve from aggressively raising interest rates this year.
Along with the inflation data, the Commerce Department reported February U.S. retail sales decreased by 0.1%.