(Kitco News) - The gold market is experiencing some volatility after the latest data shows U.S. producers saw easing price pressures last month.
The headline Producer Price Index (PPI) fell -0.1% in August, following July’s unrevised 0.9% rise, the U.S. Labor Department announced on Wednesday. The latest inflation data was cooler than expectations, as economists looked for a 0.3% increase.
In the last 12 months, headline wholesale inflation increased 2.6%, the report said, well below the consensus and July’s unrevised 3.3% reading.
Core PPI, which strips out volatile food and energy costs, fell -0.1% in August, below economists’ 0.3% consensus forecast and following July’s unrevised 0.9% reading. Annual core PPI was 2.8%, against the consensus expectation for a 3.5% reading and July’s downwardly revised 3.4% print.
Gold prices spiked higher immediately after the 8:30 am EDT data release, but pulled back just as quickly. Spot gold last traded at $3,650.78 for a gain of 0.65% 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 price growth, combined with cooler-than-expected CPI inflation, would enable the Federal Reserve to move up the timeline for further rate cuts, which would represent a tailwind for gold prices.
