The producer price index was published today. It showed a moderate decrease in the PPI for finished goods in October compared to September – a decrease of 0.3%.
This report also serves as an indicator for the upcoming U.S core CPI to be published tomorrow, November 16th.
The energy index is one of the prime factors that declined during October by 1.4%, while the food index slightly inclined by 0.1%. On an annual scale, the PPI inclined by 5.9% during the past 12 months.
The Producer Price index excluding food and energy remained unchanged during October.
This PPI ex food and energy is estimated to have a lagged negative linear correlation with gold price; i.e. as the PPI falls, gold price tends to rise the following day. Furthermore, the PPI excluding food and energy has a positive linear correlation with silver price. These relations are mainly directed via the U.S dollar changes. If this relation will also hold up this time, this news of the PPI declining might affect gold price to rise and silver price to slightly decrease. Currently the gold and silver prices are traded slightly up:
Current gold price, short term futures (December 2011 delivery) is traded at $1,784.5 per t oz. a $6.1 increase as of 14:53*.
Current silver price, short term futures (December 2011 delivery) is traded at $34.730 per t oz. a $0.706 increase as of 14:31*.
Euros to US dollar exchange rate is currently traded down at 1.3537 a 0.7075% decrease as of 15:11*.
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