Gold futures reach record high after inflation measurements

WASHINGTON (dpa-AFX) – The price of gold rose to a new record high on Thursday as weak inflation data raised hopes of a series of interest rate cuts by the US Federal Reserve starting this month.

The weakness of the dollar supported the yellow metal. The dollar index fell to 101.42, losing about 0.25 percent.

Gold futures for September closed up $39.10, or about 1.56%, at $2,551.20 an ounce.

Silver futures for September closed at $29.743 an ounce, up $1.1800 or about 4.13%.

Copper futures for September climbed to 4.1320, gaining $0.0490, or about 1.15%.

The U.S. Labor Department said its producer price index for final demand rose 0.2 percent in August, but revised data showed prices remained unchanged in July.

Economists had expected a slight increase in producer prices of 0.1 percent, which would correspond to the increase originally reported for the previous month.

Although the data has reduced the likelihood of a 50 basis point rate cut by the US Federal Reserve next week, rates are still expected to be significantly lower by the end of the year.

At the same time, the report said that the annual growth rate of producer prices slowed from 2.1 percent in July (downwardly revised) to 1.7 percent in August.

The year-on-year increase in producer prices is expected to slow to 1.8 percent from the 2.2 percent originally reported for the previous month.

The CME Group’s FedWatch tool currently expects interest rates to fall by at least one percentage point after the Fed’s December meeting.

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