Gold Holds Above $4,150 Despite Sharper-Than-Expected US Wholesale Inflation Surge

Spot gold prices rebounded above $4,150 per ounce on Thursday, rising 1.63% during morning trading despite stronger-than-expected U.S. wholesale inflation figures. December gold futures also traded higher near $4,174 per ounce. The precious metal found support from a weaker U.S. dollar and declining Treasury yields, which helped offset headwinds from rising producer prices.

The producer price index rose 6.3% year over year in September, beating market forecasts of 5.5%, while the monthly increase of 1.3% marked the largest jump since March 2022. Core wholesale inflation climbed 0.7% for the month. Combined with higher-than-expected consumer inflation data from the previous day, the figures indicate persistent price pressures across supply chains. Hotter inflation data typically fuels expectations that the Federal Reserve will maintain higher interest rates, which increases the opportunity cost of holding non-yielding assets like gold. However, concerns over broader economic fallout from sticky inflation and the dollar's retreat helped sustain gold demand.

Investors will monitor upcoming Federal Reserve policy decisions to see if central bankers consider further interest rate increases. Analysts note that solid investment demand, central bank purchasing, and inflows into exchange-traded funds should provide strong support for gold in the $4,000 to $4,100 price range, while persistent inflation readings could trigger additional market volatility.