Gold market continues to see sharp technical selling pressure as U.S. PPI rises 9.7%
Wednesday, the U.S. Labor Department said its Producer Price Index (PPI) rose 1.0 % in January following December's rise of 0.4%; the data was stronger than expected with economists' forecasting an increase of 0.5%.
For the year headline producer prices are up 9.7%.
The latest inflation data is proving some support for gold as prices have risen from their session lows; however, the market continues to see strong technical selling pressure after hitting a new three-month high Monday. April gold futures last traded at $1,851.90 an ounce, down nearly 1% on the day.
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Core PPI, which strips out volatile food and energy costs, rose 0.8% last month, following December's increase of 0.5%. Economists were expecting to see a 0.5% rise."This is another dose of hot inflation data," said Adam Button, chief currency strategist at Forexlive.com. "As this continues and spreads, it adds more and more pressure on companies to raise prices."