Gold Plunges Amid Hawkish Fed Bets and Surging Energy Prices
The gold price dropped by approximately 0.90% on Thursday due to traders pricing in a hawkish Federal Reserve following the release of the US Producer Price Index (PPI) for August.
The PPI came in at 0.4% MoM, matching forecasts, but its annual rate reached 5.4%, slightly above the expected 5.3%. Excluding volatile items, the data were aligned with economists' predictions, though the monthly core increase was 0.2%, lower than the forecasted 0.3%.
The US PPI rose 0.1% in July, a slight upward revision from the original estimate of no change. Energy prices drove much of the monthly gain, with the index for final demand goods advancing 1.1% in August, and energy prices up 4.2%. Diesel fuel alone contributed to this increase.
The XAU/USD trades at $4,360 at the time of writing. Stock market futures were negative following the release of the PPI data, with traders fully pricing in a Fed rate hike in October.