(Kitco News) - The gold market is holding steady after the latest data shows U.S. producers saw moderate price pressures last month.
The headline Producer Price Index (PPI) rose 0.1% in September, following August’s 0.2% increase, the U.S. Labor Department announced on Friday. The latest inflation data was in line with expectations, as economists looked for a 0.1% increase.
In the last 12 months, headline wholesale inflation increased 1.8%, the report said, above the consensus of 1.6% but below August’s upwardly revised 1.9% reading.
Core PPI, which strips out volatile food and energy costs, rose 0.2% in September, also in line with economists’ forecasts and following August’s unrevised 0.3% reading. Annual core PPI was 2.8%, above the consensus expectation for a 2.7% reading and August’s 2.4% print.
Gold prices spiked to session highs after the 8:30 am EDT data release, but quickly returned to their prior levels. Spot gold rose to a session high of $2,650.19 per ounce immediately following the PPI release, and last traded at $2,646.60 for a gain of 0.63% on the day.
PPI is viewed as a leading inflation indicator as producers pass higher input costs on to their customers.
Market analysts have said that falling producer prices, combined with improving CPI inflation, would give the Federal Reserve the confidence to continue lowering interest rates at upcoming meetings, which would help support gold’s long-term uptrend.
