Gold price near daily highs as U.S. Producer Price Index eases more than expected in April
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(Kitco News) Gold edged up and hit new daily highs after the U.S. Producer Price Index (PPI) cooled more than expected last month, coming in at 2.3% annually versus the expected 2.4%.
On a monthly basis, the PPI advanced 0.2% in April after March’s drop of 0.4%. Core PPI, which strips out volatile food and energy prices, was up 0.2% month-on-month after coming in flat in March. And the annual core PPI slowed to 3.2% from March’s 3.4%. Market consensus calls were projecting a slowdown to 3.3% in April.
Market participants pay close attention to the PPI as a gauge for inflation at the wholesale level. It is viewed as a leading indicator because producers tend to pass on higher prices to their customers.
The PPI metric is also vital for the Federal Reserve, which just signaled a potential pause in its tightening cycle in June after raising rates by another 25 basis points last week.
Following the data release, June Comex gold futures jumped to new daily highs, briefly trading at $2,047.60 an ounce. At the time of writing, June gold was at $2,041.80, up 0.23% on the day.