Gold Stops Rally After Positive US Producer Prices

Gold steadied near 2-1/2 week highs on Friday, heading for its best week in a month on sagging risk appetite, but lost early gains after data showed a surprise spike in March U.S. producer prices.

Although market hopes have been increasing that the U.S. Federal Reserve will hold off on raising interest rates as soon as early next year, a 0.5 percent surge in the PPI index last month renewed concerns about potentially tighter monetary policy.

A day earlier, bullion hit its highest since March 24 at $1,324.40 an ounce bolstered by the Fed’s March meeting minutes which showed officials were not keen on increasing interest rates straight after unwinding bond purchases, as the markets had feared.

Spot gold was modestly lower near $1,318 an ounce, but was up 1.2 percent for the week and on track for its second straight week of gains. Gold futures for June delivery were down 0.1 percent to $1,319.40 an ounce.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza