(Kitco News) – Gold prices are holding at session highs as the inflation threat in the U.S. continues to growth with producers feeling the heat.
Wednesday, the U.S. Labor Department said its Producer Price Index (PPI) rose 1% in June following May’s 0.8%; the data was stronger than expected with economists’ forecasting an increase of 0.6%.
For the year, producer prices rose 7.3% the largest advance since 12-month data were first calculated in November 2010.
The report said that core producer prices rose also rose 1% last month, up from May’s increase of 0.7%. Economists were expecting to see a 0.5% rise in wholesale inflation.
Gold prices were holding strong gains ahead of the latest inflation report and have added to those gains in initial reaction. August gold futures last traded at $1,829.20 an ounce, up 1% on the day.
Economists pay close attention to producer prices as it is a leading indicator for consumer prices. Traditionally, companies pass on higher costs to their customers.
