Gold traded higher on Thursday (3/13) even as the dollar strengthened after another report showed U.S. inflation eased last month.
Gold for April delivery was last seen up $6.20 at $2,953.00 an ounce.
The gains came as the U.S. Bureau of Labor Statistics reported the February Producer Price Index (PPI), a measure of wholesale prices, rose at an annualized pace of 3.2% in February, down from 3.7% a month earlier and below the FactSet consensus estimate for a reading of 3.3%. The core PPI, which excludes volatile food and energy prices, fell 0.1% from January, down from a 0.5% gain that month and again below the consensus estimate for a monthly increase of 0.3%.
The data followed Wednesday's release of the U.S. Consumer Price Index, which rose at a less-than-expected 2.8% annualized rate last month, down from 3.0% in January.
Slower inflation has raised some expectations for further interest rate cuts from the Federal Reserve that would lower the cost of holding gold, even as U.S. President Donald Trump has launched an inflationary trade war that has largely not yet come to fruition and stepped up purchases of the safe-haven asset.
"President Trump's rapid move to announce, if not actually enact, tariffs has contributed to geopolitical uncertainty and raised inflation expectations, helping to depress front-end real interest rates and support gold in the face of periodic USD strength and initially reduced expectations for a Fed rate cut," Macquarie Group noted as it raised its price forecast for the metal, seeing it trading at an average of $3,150 in the third quarter, up from $2,650.
The dollar moved higher, bearish for commodities priced in the currency. The ICE dollar index was last seen up 0.46 points at 104.08. US Treasury yields also rose, with the two-year US Treasury last seen up 1.8 basis points to 4.009%, while the 10-year was paying 4.342%, up 2.7 basis points. (Newsmaker23)
Source: MT Newswires
