Gold futures settled higher on Tuesday, rising for a fourth straight session, as the dollar turned in a somewhat sluggish performance with traders looking ahead to the crucial consumer price inflation data for clues about the central bank’s likely move with regard to interest rates.
A drop in Treasury yields following the passage of the long-delayed infrastructure bill contributed as well to the yellow metal’s uptick.
Traders also noted Chicago Federal Reserve Bank President Charles Evans’ comments on Monday that he feels the current surge in inflation is largely “temporary” and that he believes the Fed will not need to raise interest rates until 2023.
The dollar index, which fell to 93.88 in the Asian session, rose to 94.15 later on in the day, but drifted down to 94.00 subsequently, still trailing the previous close by about 0.06%.
Gold futures for December ended higher by $2.80 or about 0.2% at $1,830.80 an ounce, the highest settlement in more than a month.
Silver futures for December ended down by $0.224 at $24.318 an ounce, while Copper futures for December settled at $4.3730 per pound, down $0.0260 from the previous close.
On the economic front, a report from the Labor Department showed the producer price index for final demand advanced by 0.6% in October after climbing by 0.5% in September. Economists had expected another 0.5% increase.
Core producer prices, which exclude prices for food, energy, and trade services, rose by 0.4% in October after inching up by 0.1% in September. Core prices were expected to edge up by 0.2%.
Compared to the same month a year ago, producer prices in October were up by 8.6%, unchanged from the previous month. Meanwhile, the report showed the annual rate of growth in core producer prices accelerated to 6.2% from 5.9%.
Investors await key consumer price inflation data from the U.S. and China due this week for clues about the outlook for interest rates.
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