Gold: ‘Breaking’ the uptrend with a drop of 0.5%

Gold closed lower on Thursday, recording its first drop in five sessions, following the rise in the US producer price index in December, which was lower than market expectations.

In particular, according to data released by the US Department of Labor, producer prices on an annual basis increased by 9.7% compared to an increase of 9.6% in December 2020. Analysts polled by Reuters expected a increase to 9.8%.

This is the largest annual increase in the index since the relevant data began to be recorded in 2010, according to CNBC. On a monthly basis, producer prices increased by 0.2%.

Meanwhile, data released yesterday showed consumer prices in the US rose 0.5% in December and pushed up the cost of living last year to almost 40 years, at 7%, a sign that high inflation is likely to continue in 2022.

Gold has traditionally been seen as a means of offsetting inflation, but rising prices for goods and services, caused by disruptions in supply chains and a “resurgence” of consumer demand in the wake of the coronavirus pandemic, are likely to force Bank of America (Fed) to raise interest rates faster than expected this year and this may put pressure on precious metal prices.

In this climate, the gold delivery in February, lost $ 9.30 or 0.5% to $ 1,818 an ounce, after rising 0.5% yesterday. Gold closed Wednesday at its highest level since Dec. 31, marking its fourth straight earnings session and recording the longest rise since a seven-day run that ended Nov. 12, according to FactSet.

In the other metals, the March delivery silver fell 2.2 cents, or 0.1 percent, to $ 23,185 an ounce.

Alongside, the copper delivery in March lost 0.7% and closed at $ 4,545 per pound. End, the platinum delivery in April slipped 1% to $ 970.50 an ounce and the palladium of March delivery closed at $ 1,903.50 an ounce, down 0.6%.