WASHINGTON (dpa-AFX) - Gold prices inched higher on Wednesday after data showed U.S. producer prices rose by slightly less than expected in December, offering temporary relief to investors worried about inflation and interest rates.
Spot gold rose by 0.3 percent to $2,685.51 per ounce in European trade while U.S. gold futures were up 0.9 percent at $2,705.01.
Data from the Labour Department showed that the U.S. producer price index for final demand crept up by 0.2 percent in December after climbing by 0.4 percent in November. Economists had expected producer prices to rise by 0.3 percent.
The annual rate of producer price growth accelerated to 3.3 percent from 3 percent in November - matching economist estimates.
The dollar rally paused and bond yields dropped as investors awaited the release of a more closely watched report on U.S. consumer price inflation later in the day for greater clarity on the path of Federal Reserve rates over the coming months.
Economists expect consumer prices to rise by 0.3 percent in December, matching the increase seen in November. The annual rate of growth is expected to accelerate to 2.9 percent from 2.7 percent.
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