WASHINGTON (dpa-AFX) - Gold futures settled higher as the dollar eased and bond yields fell despite data showing a bigger than expected increase in U.S. producer price inflation dimmed hopes about an early interest rate cut by the Federal Reserve.
The dollar index dropped to 104.96 before edging up a bit to 105.03, still down nearly 0.2% from the previous close.
Gold futures for May ended higher by $17.30 or about 0.75% at $2,353.40 an ounce.
Silver futures for May ended up by $0.264 or nearly 1% at $28.485 an ounce, while Copper futures climbed to $4.8940, up $0.1280 or about 2.6%.
The Labor Department said its producer price index for final demand climbed by 0.5% in April after a revised 0.1% dip in March. Economists had expected producer prices to rise by 0.3% compared to the 0.2% uptick originally reported for the previous month.
The report also said the annual rate of producer price growth accelerated to 2.2% in April from a downwardly revised 1.8% in March.
The year-over-year producer price growth was expected to inch up to 2.2% from the 2.1 percent originally reported for the previous month.
While the report initially generated renewed uncertainty about the outlook for interest rates, some economists pointed to the downward revisions to the March data as a positive sign.
Meanwhile, in his speech at the annual general meeting of the Foreign Bankers's Association, Federal Reserve Chair Jerome Powell said the central bank needs to 'be patient and let restrictive policy do its work,' noting a lack of further progress on inflation during the first quarter.
The Fed chief also said his confidence inflation will slow towards the 2% target is 'not as high as it was' but reiterated he does not expect the next move to be a rate hike.
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