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Gold prices see some selling pressure as U.S. PPI sees sharpest rise in nearly a year, rising 0.7% in August
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(Kitco News) - Consumers shouldn’t expect inflation pressures to ease anytime soon as producers are seeing a sharp increase in prices.
The gold market remains under growing selling pressure after the U.S. Labor Department said its Producer Price Index (PPI) rose 0.7% last month following July’s 0.4%. According to consensus forecasts, the data was cooler than expected, with economists looking for an increase of 0.4%.
“The August advance is the largest increase in final demand prices since moving up 0.9 percent in June 2022,” the report said.
In the last 12 months headline inflation rose 1.6% the report said.
Meanwhile, core PPI, which strips out volatile food and energy costs, rose 0.2% last month. For the year core inflation rose 2.2%, in line with expectations.
The gold market continues to struggle to find its footing as inflation pressures continue to rise. December gold futures last traded at $1,923.40, down 0.47% on the day.
Analysts have said that gold continues to face significant headwinds as the inflation threat will continue to support the Federal Reserve’s aggressive monetary policies.
Analysts note that rising energy costs had the largest impact on inflation last month.
“There is much to unpack here but if you strip out energy, there aren't many pressures in the pipeline. But can you really strip out energy,” said Adam Button, chief currency strategist at Forexlive.com.
