WASHINGTON (dpa-AFX) - Gold prices rose sharply on Friday amid an escalation in geopolitical tensions after the United States and the United Kingdom launched air strikes against military targets in Houthi-controlled areas of Yemen.
The rebel militants were using the areas to attack commercial vessels in one of the world's most vital waterways.
The producer price inflation data, and the drop in yields of the US 10-year Treasury Note contributed as well to the surge in bullion prices.
Investors also digested mixed comments from Federal Reserve officials on the possibility of rate cuts this year.
Gold futures for February ended higher by $32.40 at $2,051.60 an ounce.
Silver futures for March ended up $0.624 at $23.329 an ounce, while Copper futures for March settled at $3.7405 per pound, down $0.0360 from the previous close.
'Gold was boosted by the PPI data and the US 10-year yields tumbling well below 4%, while the 2-year hit an 8-month low. The yellow metal has been struggling over the last couple of weeks and the jobs report and CPI data did little to revitalize it. The PPI appears to have done just that though, although it still has some way to go to reach the new highs reached in early December,' says Craig Erlam, Senior Market Analyst at OANDA, UK & EMEA.
Data from the Labor Department showed the producer price index for final demand slipped by 0.1% in December, matching a revised dip in November. Economists had expected producer prices to inch up by 0.1% compared to the unchanged reading originally reported for the previous month.
Meanwhile, the report said the annual rate of producer price growth accelerated to 1% in December from a downwardly revised 0.8% in November. The annual rate of producer price growth was expected to speed up to 1.3% from the 0.9% originally reported for the previous month.
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