Gold Prices Rise as PPI Eases Rate Concerns, Fed Speakers on Tap

Investing.com – Gold prices rose slightly on Tuesday as the first drop in factory gate inflation in four months reinforced the argument that the Federal Reserve should pause on monetary policy tightening, on a day when three of the central bank’s top officials are due to speak in public.

At 9:38 AM ET (14:38 GMT), for February delivery on the Comex division of the New York Mercantile Exchange gained $2.40, or 0.19%, to $1,293.70 a troy ounce.

dropped a more-than-expected 0.2% in December while the also unexpectedly declined. The data added to evidence of a slowdown at the end of last year, weakening the argument for further interest rate hikes.

Higher interest rates tend to weigh on demand for gold, which doesn’t bear interest, in favor of yield-bearing investments.

Three public appearances by Fed officials later today may give a taste of how the central bank’s thinking is evolving, and give clues on the pace of future rate hikes through 2019 and beyond.

Minneapolis Fed President is due to speak on the regional economy before the Rochester Economic Summit at 9:30AM ET (16:30 GMT).

Kansas City Fed President will then speak about the economic outlook and monetary policy at 1:00PM ET (18:00 GMT).

Finally, Dallas Fed President will participate in a moderated question-and-answer session before the Plano Chamber of Commerce Annual Meeting at 1:00 PM ET (18:00 GMT).

After the Fed hiked rates four times in 2018, investors now expect the U.S. central bank to halt its monetary tightening policy this year as risks to the U.S. economy mount.

In other metals trading, rose 0.16% at $15.713 a troy ounce by 9:39 AM ET (14:39 GMT).

advanced 0.79% to $1,292.15 an ounce, while sister metal traded up 0.55% at $806.95.

In base metals, gained 0.72% to $2.654 a pound.

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