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Gold rallies above $1,300 after U.S. PPI report, Ukraine in spotlight

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Investing.com -

Investing.com - Gold prices rallied above the key $1,300-level on Wednesday, after data showed U.S. producer price inflation rose more than expected in April and as investors continued to monitor events in Ukraine.

On the Comex division of the New York Mercantile Exchange, gold for June delivery climbed 1%, or $12.90, to trade at $1,307.70 a troy ounce during U.S. morning hours.

Prices hit $1,309.10 an ounce earlier in the day, the most since May 7. Gold eased down 0.08%, or $1.00, on Tuesday to settle at $1,294.80 an ounce.

Gold prices were likely to find support at $1,277.70 an ounce, the low from May 12 and resistance at $1,315.00, the high from May 7.

Also on the Comex, silver for July delivery rallied 1.9%, or 37.1 cents, to trade at $19.91 a troy ounce, the highest level since April 15.

The Commerce Department said that producer prices in the U.S. increased by a seasonally adjusted 0.6% last month, above forecasts for a 0.2% gain, after rising 0.5% in March.

Year-over-year, the producer price index rose at an annualized rate of 2.1% in April, above expectations for a 1.7% increase and up from 1.4% in the preceding month.

The core producer price index advanced 0.5% last month, compared to expectations for a 0.2% increase, after rising 0.6% in March.

Core produces prices rose at an annualized rate of 1.9% in April, beating forecasts for a 1.4% gain and after climbing 1.4% in the preceding month.

Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories.

Meanwhile, investors remained cautious after seven Ukrainian soldiers were killed and seven wounded in an ambush by pro-Russian separatists in eastern Ukraine on Tuesday, stoking fears that the crisis will further escalate and drag the U.S. deeper into the standoff.

Elsewhere in metals trading, copper for July delivery rose 0.86%, or 2.7 cents, to trade at a ten-week high of $3.163 a pound amid speculation demand from top consumer China will increase in the near-term.

The Asian nation is the world's largest copper consumer, accounting for almost 40% of world consumption last year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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