Gold futures settle at record high after inflation data

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

The weakness of the dollar caused the yellow metal to fall. The dollar index fell to 101.42, losing about 0.25%.

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

Silver futures for September are 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% in August, while revised data showed prices were unchanged in July.

Economists had expected a slight increase in producer prices of 0.1%, which was in line with the increase originally reported for the previous month.

Although the data has reduced the likelihood that the Federal Reserve will cut interest rates by 50 basis points next week, rates are still expected to be significantly lower by the end of the year.

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

Producer price growth was expected to slow to 1.8 percent year-on-year, after originally reported for the previous month.

CME Group’s FedWatch tool currently suggests that interest rates will be cut by at least a full percentage point after the Fed’s December meeting.

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