Soft PPI and Higher Jobless Claims Fail to Push Gold Above $4,400

Gold prices traded volatile after the release of U.S. PPI and Jobless Claims data on Thursday. Bullion initially received support from weaker-than-expected economic readings, but it was still unable to reclaim the $4,400 level and remained around the $4,385-$4,395 area.

U.S. July PPI was unchanged at 0.0% month-on-month, below market expectations for a 0.2% increase. On an annual basis, producer inflation slowed to 4.7%, also below the 4.9% forecast. Core PPI rose 0.2% on the month, softer than the expected 0.3%, indicating that producer-level inflation pressures are beginning to ease.

Labor-market data also carried a slightly dovish signal. Initial Jobless Claims increased by 9,000 to 209,000, above market expectations of around 202,000. However, Continuing Claims declined to about 1.78 million, suggesting that the labor market has not yet deteriorated sharply.

Despite the softer headline PPI figures,

Despite the softer headline PPI figures, underlying inflation risks remain. Core PPI rose 4.2% year-on-year, slightly above the 4.1% forecast, while the measure excluding food, energy and trade services increased 0.4% month-on-month. This limited gold’s initial upside response.

The latest data followed a relatively tame July CPI report. The combination of moderate consumer inflation, softer headline PPI and higher unemployment claims gives the Federal Reserve more room to keep interest rates unchanged in September. However, persistent core inflation and elevated energy prices remain key risks.

Newsmaker Analysis: The latest U.S. data is broadly supportive for gold as producer inflation cooled and jobless claims increased. However, sticky underlying inflation has prevented a stronger breakout. The $4,400 level remains a key resistance area. If the U.S. dollar and Treasury yields weaken further, gold could retest $4,400-$4,450. Failure to break above $4,400 may keep bullion in a consolidation phase.(mrv)

Source : Newsmaker.id

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