Gold hit its highest in nearly three months on Thursday afternoon on further dollar weakness.
The spot gold price was last up $10.30 on the previous session at $1,224.50/1,225.30 per ounce and close to its earlier peak of $1,227.10, its highest since February 17.
The dollar had already been looking weaker throughout the session, trading at its lowest since February at 1.1444 against the euro at one stage, following weaker-than-expected retail sales figures on Wednesday.
Weakness continued into the afternoon session when the US producer price index at -0.4 percent missed the expected 0.1 percent. The core figure, which strips out volatile elements, at -0.2 percent undershot the forecast 0.1 percent.
Sluggish demand at the start of the second quarter will exacerbate fears that what was thought to be a temporary slowdown in the first quarter may well stretch into the second and ultimately stay the Fed’s hand when it comes to the normalisation of monetary policy.
US retail sales on Wednesday at 0.0 percent missed consensus of 0.3 percent while the core figure at 0.1 percent fell short of the expected 0.4 percent. Import prices at -0.3 percent also undershot the forecast 0.3 percent.
Offsetting the downward sentiment were unemployment claims at 264,000 against consensus at 272,000.
Silver also struck its highest in three months at $17.49 per ounce. It remains close to this level – it was last at $17.45/17.50, up 38 cents.
The PGMs were mixed – platinum was last up $17 at $1,157/1,167 per ounce, a two-week high, while palladium was down $2 at $778/784.
(Editing by Mark Shaw)
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