14/06/07: Gold futures up on back of US inflation figures
Gold futures rose by up to $5 per ounce today (June 14th) over concerns about US inflation.
As US wholesale prices increased by more than was expected, gold futures climbed as bullion's attractiveness as an investment hedge grew. Increasing energy prices pushed up the wholesale prices.
John Person of NationalFutures told MarketWatch: "The PPI [producer inflation figures] report shows [that] while the headline number was 'hot', the core number was only [up] 0.2 per cent - so gold had a mild but positive reaction.
"But most traders and investors know that inflation is driven by accelerating costs such as food and energy, and this is what is supporting gold now. Inflation is probably under-estimated. Gold is a value buy."
He predicted that gold would rise above the $700 per ounce level by the middle of October.
The PPI index for finished goods rose by 0.9 in May, on the back of a 0.7 per cent rise in April. Core PPI (which excludes food and energy) rose by 0.2 per cent.