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Gold slips below two-month high after softer US PPI

Gold was about 0.7% lower on the day near $4,377 after July PPI showed headline prices unchanged, with annual PPI easing to 4.7%.

Reported · Written up by our desk · Precious Metals

Gold (XAU/USD) eased on Thursday after failing to build on a fresh two-month high of $4,449 during Asian trading hours. The metal was last around $4,377, down 0.7% on the day, as a softer US Producer Price Index report weighed on the outlook for near-term rates.

The US Bureau of Labor Statistics said headline PPI was unchanged in July after falling 0.1% in June, while the annual rate slowed to 4.7% from 5.5%. Core PPI rose 0.2% month over month, down from 0.4%, and the annual core rate eased to 4.2% from 4.7%.

FXStreet said the price move comes as market participants remain cautious about chasing gold higher amid an uncertain macroeconomic backdrop. The broader rally from near $4,000 had been supported by softer US economic signals, including CPI data that was broadly in line and weaker-than-expected July Nonfarm Payrolls.

According to FXStreet, markets cut their odds of a September rate hike, with the CME FedWatch Tool assigning a 32% probability versus 55% a week earlier. US Treasury yields fell across the curve and the US Dollar Index slipped below 100, factors that helped limit gold’s downside even as uncertainty around the Fed’s policy path capped the upside.

Latest closeGold $4,467.10 ▲1.9%|Dollar index 99.99 ▲0.2%

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