Gold finding its footing as US producer prices fall in June

The gold market is once again attracting bullish momentum, pushing back into neutral territory as wholesale inflation pressures eased more than expected. The headline Producer Price Index (PPI) fell 0.3% in June, following May's downwardly revised 0.6% increase, the U.S. Labor Department announced Wednesday. The latest inflation data came in weaker than expected, as economists had forecast an unchanged reading. Over the past 12 months, headline wholesale inflation increased 5.5%, the report said, below consensus estimates of 6.2%. Meanwhile, core producer prices, which strip out volatile food and energy prices, rose 0.2% last month, following May's downwardly revised 0.1% increase. Over the past 12 months, core PPI increased 5.1%. The gold market has attracted an initial bid in reaction to the cooler-than-expected inflation data. Spot gold last traded at $4,064.90 an ounce, up 0.33% on the day. Sentiment toward gold is beginning to improve as softer inflation data prompts markets to scale back their aggressive expectations for U.S. monetary policy.