12 April 2019

Zimbabwe: Gold Prices Under Pressure

The gold market remains under pressure after wholesale inflation pressures rose sharply last month. Yesterday, the US Labour Department said its Producer Price Index (PPI) rose 0,6 percent in March, following February's increase 0,1 percent ; the data was significantly stronger than expected with economists' forecasting an increase of 0,3 percent.

This is the first time in four months that producer inflation beat expectations.

At the same time core PPI, which strips out volatile food and energy costs, increased 0,3 percent last month, following February's increase of 0,1 percent. Economists were expecting to see wholesale inflation rise 0,2 percent.

However, the gold market is not seeing much reaction to the higher inflation data. June gold futures last traded at $1 301,40 an ounce down 0,94 percent on the day.

Economists pay close attention to producer prices as it is a leading indicator for consumer prices. Tradionally, companies pass on higher costs to their customers.

Economists note that strong PPI data raises the downside risk to consumer inflation pressures.

According to some analysts, gold is not seeing much reaction to the inflation data because most of the increase was due to volatile energy prices. The gasoline index increased 16 percent last month, according to the report.

For the year, headline inflation rose 2,2 percent, up from 1,9 percent reported in February; however, core inflation for the year was 2 percent, down from February's reading of 2,3 percent. According to reports, this is the lowest annual inflation reading since August 2017. -- Kitco News.

Zimbabwe

Opposition's Majome Sworn in As Anti-Corruption Commissioner

President Emmerson Mnangagwa has sworn in former Harare West legislator and a member of the opposition Movement for… Read more »

See What Everyone is Watching

More From: The Herald

Don't Miss

AllAfrica publishes around 700 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.