WASHINGTON (dpa-AFX) - Gold prices moved higher on Tuesday as the dollar shed ground after data showed a drop in U.S. producer price inflation. A drop in bond yields also supported the yellow metal.
Ten-year bond yields in the U.S. eased 0.35%. The longer-tenor 30-year bond witnessed a decline of 0.2% in yields whereas the shorter-tenor 5-year bond recorded a decline of nearly 0.4%.
The dollar index, which climbed to 110.18 on Monday, dropped to a low of 109.20 in the New York session today, and was last seen at 109.27, down more than 0.6% from previous close.
Gold futures for January settled higher by $4.00 or about 0.15% at $2,677.50 an ounce.
Silver futures for January closed up $0.041 or 0.14% at $30.132 an ounce, while Copper futures for January climbed to $4.3125 per pound, gaining $0.0170 or 0.4%.
Data from the Labor Department said the producer price index for final demand crept up by 0.2% in December after climbing by 0.4% in November. Economists had expected producer prices to rise by 0.3%.
Meanwhile, the report said the annual rate of producer price growth accelerated to 3.3% in December from 3% in November. The acceleration matched economist estimates.
The smaller than expected monthly increase by producer prices helped ease recent concerns about the outlook for inflation and interest rates, although the faster annual growth has kept buying interest somewhat subdued.
Investors now await U.S. consumer price inflation data. Economists currently expect consumer prices to rise by 0.3% in December, matching the increase seen in November. The annual rate of growth is expected to accelerate to 2.9% from 2.7%.
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