Gold price moves closer to $1,800 as U.S. Producer Price Index slows more than expected in October
(Kitco News) Gold ticked up after the U.S. Producer Price Index’s (PPI) acceleration cooled more than expected in October, coming in at 8% on an annual basis versus the expected 8.3%.
On a monthly basis, the PPI advanced 0.2% last month after September’s 0.2% gain. Core PPI, which strips out volatile food and energy prices, was flat month-on-month after the previous month’s 0.2% increase. And the annual core PPI rose 6.7% versus the expected 7.2%. In September, the measure came in at 7.1%.
Market participants pay close attention to the PPI as a gauge for inflation at the wholesale level. It is seen as a leading indicator because producers are known to pass on higher prices to their customers.
The Federal Reserve is also keeping a very close eye on all the latest inflation metrics as it considers whether it can proceed with hiking but at a lower pace at the upcoming December meeting.
Gold jumped following the data release, with December Comex gold futures last trading at $1,787.20, up 0.58% on the day.