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Gold price holding support above $1,700 but remains down as U.S. PPI rises 11.3% in June

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(Kitco News) - Gold prices are holding support above $1,700 an ounce but continue to struggle as producer inflation pressures continue to rise, pointing to further pain for consumers.

Thursday, the U.S. Labor Department said its Producer Price Index (PPI) rose 1.1% in June, following May’s 0.9% rise. Inflation was hotter than expected as economists were looking for another 0.8% rise.

For the year, headline inflation rose 11.3%, “the largest increase since a record 11.6-percent jump in March 2022,” the report said.

Meanwhile, the report said that core inflation, which strips out food and energy costs rose 0.4%, slightly missing expectations. Markets were looking for a 0.5% rise.

The gold market is not seeing much reaction to the latest inflation data. August gold futures last traded at $1,710 an ounce, more than 1.5% on the day.

The report said that energy prices continues to domiante producer costs. The gasoline index jumped 18.5% last month.

"Over half of the June increase in the index for final demand goods is attributable to gasoline prices," the report said.

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