Gold prices hit session highs following the release of mixed U.S. inflation data, which showed producer prices rising slightly more than expected in August. The U.S. Labor Department reported that the Producer Price Index (PPI) increased by 0.2%, up from July’s 0.1% rise and surpassing economists’ expectations of a 0.1% gain.
Over the past 12 months, headline wholesale inflation rose 1.7%, slightly below the anticipated 1.8% and July’s revised 2.1% reading. Meanwhile, core PPI, which excludes volatile food and energy prices, increased by 0.3% in August, also exceeding forecasts of 0.2%. Annually, core PPI matched July’s 2.4% but fell just below the expected 2.5%.
Gold prices responded positively to the inflation data, with spot gold reaching session highs, trading at $2,525.43 per ounce, up 0.54% on the day.
PPI is closely watched as a leading indicator of inflation, as higher production costs often lead to higher consumer prices. Analysts suggest that declining producer prices, alongside improving consumer inflation, could encourage the Federal Reserve to implement a larger-than-expected rate cut in September, potentially boosting gold’s long-term upward trajectory.
