Gold Gains as Weak US PPI Pressures Dollar and Treasury Yields
Gold prices slightly rose during the American session on Wednesday after softer-than-expected US producer inflation data weakened the US dollar and Treasury yields, supporting demand for the precious metal. At the time of writing, XAU/USD traded above $4,050 after recovering from an intraday low of $4,017 as June headline PPI fell 0.3% monthly and annual producer inflation slowed to 5.5%. Core PPI increased 0.2% monthly and 4.7% annually, both below forecasts, following weaker US consumer inflation data that reduced expectations of an immediate Federal Reserve interest rate increase. Gold's gains remained limited as higher oil prices and Middle East tensions sustained inflation concerns, while Federal Reserve officials Kevin Warsh and John Williams reaffirmed their commitment to returning inflation to the 2% target. "Gold continues to search for direction following a sharp correction since January, with recent price action increasingly reflecting the market's struggle to determine whether inflation or slowing economic growth will become the dominant macro theme during the second half of the year," wrote Ole Hansen, head of commodity strategy at Saxo Bank, in a Wednesday.
Gold prices slightly rose during the American session on Wednesday after softer-than-expected US producer inflation data weakened the US dollar and Treasury yields, supporting demand for the precious metal.
At the time of writing, XAU/USD traded above $4,050 after recovering from an intraday low of $4,017 as June headline PPI fell 0.3% monthly and annual producer inflation slowed to 5.5%.
Core PPI increased 0.2% monthly and 4.7% annually, both below forecasts, following weaker US consumer inflation data that reduced expectations of an immediate Federal Reserve interest rate increase.
Gold's gains remained limited as higher oil prices and Middle East tensions sustained inflation concerns, while Federal Reserve officials Kevin Warsh and John Williams reaffirmed their commitment to returning inflation to the 2% target. "Gold continues to search for direction following a sharp correction since January, with recent price action increasingly reflecting the market's struggle to determine whether inflation or slowing economic growth will become the dominant macro theme during the second half of the year," wrote Ole Hansen, head of commodity strategy at Saxo Bank, in a Wednesday.