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Gold rises after softer US PPI data but oil gains temper momentum
XAU/USD was up 0.30% on the day near $4,064 after June PPI fell 0.3% month over month, while renewed Middle East tensions helped lift oil.
Gold edged higher on Wednesday, trimming its intraday losses as a softer-than-expected US Producer Price Index report weighed on the US dollar and Treasury yields. At the time of writing, XAU/USD traded around $4,064, up 0.30% on the day, after dipping to an intraday low near $4,017. The June PPI reading fell 0.3% month over month, coming in below the forecast of no change, after increasing 0.6% in May. On an annual basis, producer inflation slowed to 5.5% from 6.0%, also undershooting expectations. Core PPI, excluding food and energy, rose 0.2% month over month, under the 0.4% forecast, with the annual core rate edging up to 4.7% from 4.6%, below the 5.2% estimate.
The data followed weaker US Consumer Price Index results released on Tuesday, and the softer inflation backdrop reduced expectations of an immediate Federal Reserve rate hike, supporting the non-yielding metal. However, gold lacked strong upside momentum because oil prices were creeping higher amid renewed fighting in the Middle East, keeping the possibility of a later-year Fed hike in focus.
On the rates outlook, New York Fed President John Williams said inflation is still too high and must be brought back to the Fed’s 2% target on a sustained basis, while expecting headline inflation to ease toward 3.25% by the end of this year. Technically, XAU/USD maintained a bearish near-term bias, holding below key longer-term moving averages, suggesting upside attempts could be capped for now.
Latest closeGold $4,058.20 ▲1.5%