(Updates prices.)
Gold edged higher midafternoon Wednesday even as the dollar rose after a report showed U.S. wholesale inflation surged in April.
Gold for June delivery was last seen up $17.90 to US$4,704.60 per ounce.
The U.S. Bureau of Labor Statistics reported the Producer Price Index (PPI) rose at a 1.4% monthly pace from March, up from 0.7% a month earlier and well ahead of the consensus expectation for a rise of 0.5%, according to Marketwatch. On an annualized basis, PPI was up 6.0% in April, up from 4.3% a month earlier. Core PPI, excluding volatile food and energy, rose 4.4% annualized, up from 3.7% in March.
"The April increase is the largest advance since rising 1.7 percent in March 2022. On an unadjusted basis, the index for final demand rose 6.0 percent for the 12 months ended in April, the largest 12-month increase since moving up 6.4 percent in December 2022," the bureau noted.
The report comes a day after the bureau reported the Consumer Price Index rose 3.8% year over year in April, up from 3.3% in March.
Inflation has surged since the war on Iran pushed up oil prices by more than half, raising worries central banks will raise interest rates to slow rising prices, bearish for gold since it pays no interest.
"At the last Fed decision, three members dissented against the bank's decision to maintain its "easing bias", and the question is whether more rate setters will join that group at the next rate decision if energy prices remain high," Gustav Helgesson, Macro Strategist at SEB Research, wrote.
The dollar was higher, with the ICE dollar index last seen up 0.21 points to 98.51. Treasury yields were also higher, with the yield on the U.S. two-year note up 0.2 basis points to 4.0%, while the 10-year note was up 1.6 points to 4.486%.