Gold futures rose as a U.S. government report showed wholesale prices climbed in May for the first in three months, increasing the appeal of the precious metal as a hedge against inflation.
The producer-price index rose 0.5 percent after falling 0.7 percent in April, which was the biggest drop in more than three years, Labor Department data showed. The median estimate in a Bloomberg survey projected the measure would gain 0.1 percent. Through yesterday, gold fell 18 percent this year after some investors lost faith in the metal as a store of value, while consumer costs rose the least in five decades.
“Suddenly, people are talking about inflation,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “Today, the safe-haven appeal is back.”
Gold futures for August delivery gained 0.6 percent to $1,386.60 an ounce at 9:34 a.m. on Comex in New York. Trading was 40 percent below the 100-day average for this time, according to data compiled by Bloomberg.
Yesterday, assets in the SPDR Gold Trust, the biggest exchange-traded product backed by the metal, declined 6.3 metric tons to 1,003.53 tons, the lowest since February 2009.
Newcrest Mining Ltd. (NCM), Australia’s largest gold producer, said last week it will write down the value of its assets by as much as A$6 billion ($5.8 billion) after the slump in prices.
Silver futures for July delivery rose 2 percent to $22.01 an ounce, heading for the biggest gain in more than a week.
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