MTECHTIPS;-Gold hits session highs after U.S. inflation data

MTECHTIPS;-Gold hits session highs after U.S. inflation data disappoints

MTECHTIPS-Gold prices extended gains on Thursday, hitting their highest levels of the session after data showed that U.S. producer prices unexpectedly fell in July, recording their biggest drop in nearly a year. Comex gold futures rose to a daily peak of $1,291.20 a troy ounce, a level not seen since June 8. It was last at $1,290.45 by 9:05 AM ET (1305 GMT), up $11.10, or around 0.9%. The Labor Department said its producer price index slipped 0.1% last month, reversing June’s 0.1% gain. July’s drop was the largest since August 2016. In the 12 months through July the PPI increased 1.9% after rising 2.0% in the year through June. Economists had forecast the PPI ticking up 0.1% last month and climbing 2.2% from a year ago. The unexpected drop in producer prices backed bets of a slower pace of interest rate hikes from the Federal Reserve. Gold has been well-supported in recent weeks as fading expectations for a third Fed rate hike this year due to weak inflation combined with deepening political turmoil in the White House boosted the appeal of the precious metal. Gold scored its sharpest daily rise since mid-May on Wednesday as investors piled into safe haven assets amid intensifying tensions between the U.S. and North Korea.

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