Gold Futures Settle Lower As Dollar Rises After PPI Data
Gold prices edged lower on Friday as the dollar climbed after data showing a bigger than expected increase in U.S. producer prices in the month of July raised concerns the Federal Reserve will keep interest rates higher for a longer duration.
The dollar index climbed to 102.91, gaining nearly 0.4%.
Gold futures for December ended down $2.30 at $1,946.60 an ounce.
Silver futures for September ended lower by $0.078 at $22.743 an ounce, while Copper futures for September settled at $3.7190 per pound, down $0.0460 from the previous close.
Data from the Labor Department showed producer prices climbed by slightly more than expected in the month of July. The data said the producer price index for final demand rose by 0.3% in July following a revised unchanged reading in June.
Economists had expected producer prices to inch up by 0.2% compared to the 0.1% uptick originally reported for the previous month.
The report also showed the annual rate of producer price growth reaccelerated to 0.8% in July after slowing to just 0.2% in June. The rate of growth was expected to accelerate to 0.7%.
A separate report released by the University of Michigan showed the consumer sentiment index edged down to 71.2 in August after spiking to 71.6 in July. Economists had expected the index to slip to 71.0.
“Gold prices are tentatively breaking down below key support at the $1950 level. A stronger dollar is knocking gold down after both a hot PPI report and as easing long-term inflation expectations stay within the range that was set from the past two years,” said Edward Moya, Senior Market Analyst at OANDA.
He added, “Gold is waiting for its day in the sun, but that might not happen until the dollar rally cools. There is a mountain of risks that could support safe-haven flows, but gold needs to see the right ones.”
Source: Read Full Article