Can gold prices hold above $5,200 as inflation pressues rise

The headline Producer Price Index (PPI) rose 0.5% in January, following December’s 0.4% increase, the U.S. Labor Department announced Friday. The latest inflation data came in hotter than expected, with economists forecasting a 0.3% rise.

Over the past 12 months, headline wholesale inflation increased 2.9%, the report said.

Core PPI, which strips out volatile food and energy costs, rose 0.8% last month—well above economists’ 0.3% consensus forecast—following November’s reading. Annual core PPI data suggest wholesale inflation is becoming embedded in the broader economy, with prices rising 3.6%; economists had expected an increase of 3.0%.

The gold market is not seeing a significant reaction to the latest inflation data. Spot gold was last trading at $5,218.20 an ounce, up 0.66% on the day. Although gold continues to benefit from safe-haven flows ahead of the weekend, some analysts have said that higher inflation could force the Federal Reserve to delay its expected rate cuts.