Gold Price Holds Small Gain After U.S. PPI Up 0.3% During February

New York (Mar 14)  Gold prices remain slightly higher after a Labor Department report Tuesday showing that producer prices for finished U.S. goods in rose by a seasonally adjusted 0.3% in February.

Going into the report, consensus expectations compiled by news organizations had been for a rise of 0.1% in the headline figure.

Prices for final demand less foods, energy, and trade services rose 0.3% in February, the largest increase since a 0.3% advance in April 2016, the Labor Department said.

As of 8:43 a.m. EDT, Comex April gold was $1.40 higher at $1,204.50 an ounce. The contract was at $1,205.60 one minute ahead of the PPI report.

“Unlike today's weather, producer prices came in hotter than expected,” said Royce Mendes of CIBC Economics.

“Energy prices contributed to the headline increase, but much less so than in the prior two months,” Mendes later commented. “Core prices were also a touch firmer than the consensus was looking for at 0.3% on the month, although the annual rate remains fairly contained at 1.5%....All told, this was a firmer-than-expected reading, but markets will be waiting for tomorrow's consumer price data for any indications on underlying inflation.”

Unadjusted, February PPI rose 2.2% for the 12 months ending with February, the government said. This was the largest advance since a 2.4% increase in the 12 months that ended in March 2012.

Market participants monitor the data as a gauge for inflation at the wholesale level. The Consumer Price Index is scheduled for release on Wednesday.

Source: KitcoNews