Gold benefits from another cooler US inflation data

Gold and silver prices are higher in early US trading session on Tuesday, following another US inflation report that came cooler than expected. Gold prices hit a three-month highs and silver prices a five-month high today. December gold was last up $12.90 at $1,769 and December silver was up $0.102 at $22.21.

The US producer price index report for October come in at up 8.0%, year-on-year, compared to a rise of 8.3% that was the consensus forecast. The month-on-month figures showed a rise of 0.2% from September, compared to a rise of 0.4% that was expected.

The core PPI reading was unchanged in October, compared to expectations for a rise of 0.3%. Other components of the PPI report were also a bit cooler than expected. The U.S. dollar index dropped sharply on the news, while U.S. Treasury yields fell. The benchmark U.S. Treasury 10-year note yield is presently fetching 3.783%. U.S. stock indexes rallied.

Global stock markets were steady to mixed overnight. U.S. stock indexes are headed for solidly higher openings when the New York day session begins. Trader and investor risk attitudes were already more upbeat Tuesday, before the PPI report, on notions the Fed will at its December meeting start to back off on its aggressive tightening of U.S. monetary policy.

Monday’s face-to-face meeting between U.S. President Biden and Chinese leader Xi Jinping also has boosted hopes the world’s two largest economies can become less adversarial. Also positive for the marketplace are recent moves by China to ease up on its Covid restrictions.