Gold closed $8.5 lower after high PPI numbers

Gold futures closed lower on Wednesday (Oct. 12) as investors feared the higher-than-expected Producer Price Index (PPI) would prompt the U.S. Federal Reserve (Fed) to sharply raise interest rates.

  • The gold contract was down $8.5, or 0.5%, at $1,677.5 an ounce.
  • Silver fell 54.9 cents, or 2.82 percent, at $18.938 an ounce.
  • The platinum contract fell $18.1, or 2.01%, at $881 an ounce.
  • The palladium contract was down $14, or 0.7%, to close at $2,136.40 an ounce.

Gold prices fell after the Labor Department said the PPI rose 0.4% month-on-month in September after falling 0.2% in August. On a year-over-year basis, the PPI was up 8.5% in September.

Core PPI (excluding food and energy) rose 0.3% month-on-month, following a 0.3% increase in August. Year-on-year, the core PPI rose by 7.2% compared with 7.2% in August.

In addition, the gold price was also put under pressure by a strong dollar and a rebound in U.S. Treasury yields.

A stronger dollar will make gold contracts more expensive for holders of other currencies. The rebound in U.S. Treasury bond yields will increase the cost of owning gold. This is because gold is an asset that does not yield a return in the form of interest.

The dollar index against the six major currencies of a basket of currencies rose 0.09% to 113.3200.

Investors will await the release of the Consumer Price Index (CPI) on Thursday (Oct. 13) for signs of consumer price inflation and the direction of Fed interest rates.

According to forecasts, the CPI will again show high inflation in September. It could rise by more than 8%, reaching a 40-year high.

The Spot Market is Open

Thursday, October 13, 2022

Metals
Updated at
USD
Bid/Ask
Ounce
Change

Low/High
Gold
10.00
1,669.20
1,670.20
-4.20
-0.25%
1,669.00
1,676.60
Silver
10.00
18.93
19.03
-0.06
-0.32%
18.92
19.17
Platinum
10.00
879.00
889.00
-3.00
-0.34%
878.00
895.00
Palladium
09.20
2,066.00
2,216.00
+2.00
+0.10%
2,060.00
2,225.00
Rhodium
05.00
12,600.00
14,600.00
0.00
0.00%
12,60000
14,600.00

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