Gold rose as this morning’s inflation report adds to economic uncertainty. Higher inflation tends to suppress the yellow metal, but safe haven inflows continue to give it support. Gold is headed for a weekly and monthly gain that could lead to its longest monthly rally streak in 50 years.
A surprising inflation jump was revealed in this morning’s delayed January PPI report. The core PPI, which excludes volatile food and energy prices, rose 0.8%, that exceeds the 0.6% gain in December and is a sharp rise over the Dow Jones consensus forecast of 0.3%. For the full year, core wholesale prices accelerated 3.6%.
This PPI data is the latest signal on the state of the U.S. economy as the Fed ponders monetary policy at its upcoming March meeting. Lower interest rates are considered bullish for gold, making it a more attractive alternate investment. The central bank kept interest rates unchanged last month after three previous rate cuts.
An advance in February would be gold’s seventh consecutive monthly increase, the longest streak since 1973. Prices have rallied almost 20% this year on geopolitical and economic uncertainty, including a U.S. military buildup in the Middle East, tariff uncertainty and concerns about the Federal Reserve’s independence.
April gold futures fell 0.3% Thursday to settle at $5,194.20 an ounce on Comex but are up 2.2% this week. Bullion is up 9.5% so far this month after surging 9.3% in January and rising 2% in December. It would be gold’s seventh consecutive monthly gain. It rallied 64% last year. The April contract is currently up $46.70 (+0.90%) an ounce to $5240.90 and the DG spot price is $5236.70.
The dollar was also little changed, keeping gold prices bookended. Since the yellow metal is denominated in the U.S. currency, a weaker dollar can make gold more attractive to holders of other currencies and vice versa.
Economic data released last week showed fourth-quarter U.S. GDP badly missed analysts’ estimates, coming in at an annual rate of 1.4%, compared with a consensus estimate for a 2.5% gain. Consumer spending also slowed. But the central bank’s favorite inflation measure, the personal consumption expenditures price index, came in around expectations for January.
More than 96% of the investors tracked by the CME FedWatch Tool are betting that the Fed will keep interest rates unchanged again in March, with the rest anticipating a 25 basis point cut. The Fed reduced interest rates for a third consecutive time in December to 3.50% to 3.75%. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts in 2024.
May silver futures declined 4.4% Thursday to settle at $87.58 an ounce on Comex, though the front-month contract added 6.4% so far this week. It touched a record above $115 in January. Silver is up 12% this month after gaining 11% in January and climbing 24% in December. It rose 141% last year. The May contract is currently up $4.241 (+4.84%) an ounce to $91.925 and the DG spot price is $92.38.
Spot palladium decreased 2.3% Thursday to $1,772.50 an ounce but is up 0.4% this week. Palladium is up 7.2% this month after advancing 2.4% in January and increasing 11% in December. Palladium gained 74% last year. Currently, the DG spot price is up $31.00 an ounce to $1794.50.
Spot platinum slid 3.5% Thursday to $2,249.40 an ounce but is up 3.9% this week. It’s up 9.3% this month after gaining 1.4% in January and surging 22% in December. Platinum increased 122% in 2025. The DG spot price is currently up $125.10 an ounce to $2358.70.
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