(Kitco News) - Gold prices continue to march higher, trading near all-time highs above $4,630 an ounce, as the latest economic data show that producer prices continue to rise, putting some pressure on overall inflation.
According to economists, although inflation remains elevated, it is still not considered a threat to expected easing from the Federal Reserve through 2026. The headline Producer Price Index (PPI) rose 0.2% in November and 0.1% in October, following a 0.6% increase in September, the U.S. Labor Department announced on Wednesday.
Over the last 12 months, headline wholesale inflation increased 3.0%, the report said. Annual inflation came in hotter than expected, as economists had been looking for an unchanged reading of 2.7%.
Wholesale inflation data for October and November were released on the same day, as the report had been delayed by the 43-day government shutdown that extended through October.
Although the Federal Reserve is expected to continue cutting rates this year, rising producer prices could create some uncertainty regarding the trajectory of rate cuts. However, this uncertainty has had little impact on gold, which continues to attract solid bullish momentum. Spot gold last traded at $4,632 an ounce, up 1% on the day.
Meanwhile, core PPI, which strips out volatile food and energy costs, rose 0.1% in November and 0.7% in October.
The report also noted that core inflation shows higher prices are becoming embedded in the broader economy. Annual core PPI increased 3.5% in November, the largest 12-month increase since March, when it also rose 3.5%.
