Trading strategy after PPI news, gold increased sharply again
World gold prices increased with spot gold increasing by 21.9 USD to 2,357.6 USD/ounce. Gold futures last traded at 2,363.6 USD/ounce, up 21.1 USD compared to yesterday morning.
Weakness in the USD and Treasury yields following US producer price data for April provided a boost to the yellow metal. The dollar fell 0.2% after US data made gold cheaper for buyers holding other currencies. Yields on the benchmark 10-year Treasury note also fell, reducing the opportunity cost of holding this non-couponing asset.
The US producer price index (PPI) in April increased by 0.5% over the previous month, a stronger increase than the forecast of 0.3%. Core PPI (excluding volatile food and energy) also rose 0.5% in April versus forecasts of 0.2%. However, March PPI was revised down to -0.1% from a 0.2% increase in the initial report. Although the April PPI report supported those who expected the US Federal Reserve (Fed) to delay interest rate cuts, the sharp downward revision to the March PPI clearly tempered the increase slightly. larger than expected in April PPI.
Weakness in the USD and Treasury yields following US producer price data for April provided a boost to the yellow metal. The dollar fell 0.2% after US data made gold cheaper for buyers holding other currencies. Yields on the benchmark 10-year Treasury note also fell, reducing the opportunity cost of holding this non-couponing asset.
The US producer price index (PPI) in April increased by 0.5% over the previous month, a stronger increase than the forecast of 0.3%. Core PPI (excluding volatile food and energy) also rose 0.5% in April versus forecasts of 0.2%. However, March PPI was revised down to -0.1% from a 0.2% increase in the initial report. Although the April PPI report supported those who expected the US Federal Reserve (Fed) to delay interest rate cuts, the sharp downward revision to the March PPI clearly tempered the increase slightly. larger than expected in April PPI.
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