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Gold Prices Give Back Ground Following Recent Strength

Gold prices showed a modest move to the downside during trading on Thursday, giving back ground after trending higher over the past several sessions.

After closing high for four straight sessions, gold for February delivery slipped $5.90 or 0.3 percent to $1,821.40 an ounce.

The pullback by the price of the precious metal came despite continued weakness in the value of the U.S. dollar, as the U.S. dollar index dipped to a new two-month low.

Traders were digesting another reading on U.S. inflation, with a report from the Labor Department showing only a slight uptick in U.S. producer prices in the month of December.

The Labor Department said its producer price index for final demand edged up by 0.2 percent in December after jumping by an upwardly revised 1.0 percent in November.

Economists had expected producer prices to rise by 0.4 percent compared to the 0.8 percent increase originally reported for the previous month.

The report also showed the annual rate of producer growth slowed to 9.7 percent in December from a record high 9.8 percent in November.

Meanwhile, a separate report from the Labor Department showed an unexpected increase in initial jobless claims in the week ended January 8th.

The report said initial jobless claims rose to 230,000, an increase of 23,000 from the previous week's unrevised level of 207,000. Economists had expected jobless claims to edge down to 200,000.

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