(Kitco News) - The gold market is attracting some bullish momentum even as it remains trapped within a broader trading range. Analysts say muted producer price inflation could provide additional upside for the precious metal.
The U.S. Labor Department said Tuesday that the headline Producer Price Index rose 0.5% in March, matching February’s revised 0.5% increase. The latest inflation data came in cooler than expected, with economists forecasting a 1.1% rise.
On an annual basis, headline wholesale inflation increased 4.0% over the last 12 months, the report said. That marks the largest 12-month advance since February 2023, when prices rose 4.7%. Despite the increase, annual wholesale inflation remained below expectations, with economists forecasting a 4.7% gain.
Core PPI, which excludes volatile food and energy prices, rose 0.1% last month, following February’s revised 0.3% increase. Core producer inflation also came in below expectations, with consensus forecasts calling for a 0.4% rise.
The report said core PPI increased 3.8% over the past 12 months, below economists’ expectations for a 4.2% increase.
Gold prices posted a modest gain in their initial reaction to the latest inflation data. Spot gold was last trading at $4,774.60 an ounce, up 0.73% on the day.
PPI is considered a leading inflation indicator because producers often pass higher input costs on to consumers.
