Sharp Decline in Gold and Silver Prices Following US PPI Data
Following the US PPI data for August exceeding expectations, significant drops were recorded in spot gold, gram gold, and silver prices.
Sharp declines occurred in gold and silver prices after the US Producer Price Index data for August was announced above expectations. These developments affected expectations regarding the Fed's interest rate decision next week.
US PPI Data Exceeds Expectations
According to data released by the US Department of Labor for August, the Producer Price Index increased by 0.4 percent on a monthly basis. On an annual basis, the PPI increase rose to 5.4 percent, surpassing the market expectation of 5.3 percent.
Core PPI and Inflation Pressure
In August, core PPI increased by 0.2 percent monthly, while the annual core PPI increase was recorded at 4.6 percent. These increases in producer prices, along with energy costs, revealed that inflationary pressures continue.
Depreciation in Spot and Gram Gold
Immediately after the data was released, spot gold lost approximately 1.70 percent in value, falling to $4,328. This drop in spot gold, which was at the $4,400 level at the beginning of the day, was also reflected in gram gold.
Current Gold Prices
With the decline, gram gold fell down to 6,742 liras. In the markets, quarter gold began trading at 11,060 TL, half gold at 22,126 TL, and full gold at the 45,400 TL level.
Losses Exceeding Four Percent in Silver Prices
Following the critical inflation data, spot silver experienced a loss of over 4 percent, pulling back to the $64 level. Gram silver, on the other hand, began to be priced at the 100 TL level in the markets.
The Fed's Interest Rate Decision and Market Focus
It was observed that the increase in producer prices heightened uncertainty regarding the Fed's meeting on September 15-16. According to Reuters, following the PPI data, the probability of the Fed raising interest rates was priced at 62 percent.
Importance of Upcoming CPI Data
The markets' focus has now turned to the consumer inflation data to be announced in the US. The upcoming CPI data following the PPI constitutes a critical threshold for the Fed's monetary policy steps.