Gold futures rose as a U.S. government report showed wholesale prices climbed in May for the first in three months, increasing the appeal of the precious metal as a hedge against inflation.
The producer-price index rose 0.5 percent after falling 0.7 percent in April, which was the biggest drop in more than three years, Labor Department data showed. The median estimate in a Bloomberg survey projected the measure would gain 0.1 percent. Through yesterday, gold fell 18 percent this year after some investors lost faith in the metal as a store of value, while consumer costs rose the least in five decades.
“Suddenly, people are talking about inflation,” Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, said in a telephone interview. “Today, the safe-haven appeal is back.”
Gold futures for August delivery gained 0.6 percent to $1,386.60 an ounce at 9:34 a.m. on Comex in New York. Trading was 40 percent below the 100-day average for this time, according to data compiled by Bloomberg.
Yesterday, assets in the SPDR Gold Trust, the biggest exchange-traded product backed by the metal, declined 6.3 metric tons to 1,003.53 tons, the lowest since February 2009.
Silver futures for July delivery rose 2 percent to $22.01 an ounce, heading for the biggest gain in more than a week.
To contact the editor responsible for this story: Steve Stroth at firstname.lastname@example.org