US Producer Prices Edge up 0.1% April

US wholesale prices up slightly, food costs down

Economists had forecast a 0.2 percent gain in this "core CPI" measure.

Copper jumped 1.7 percent to $3.108 a pound, the highest in two weeks.

According to some commodity analysts, the inflation data is positive for gold because it shows that price pressures are moving up but not at a pace that warrants aggressive action from the US central bank. He added that if economic growth remains strong the USA central bank is on target to raise interest rates in June, despite the weak inflation data, .

Many analysts believe the Fed will raise rates for a second time this year when officials next meet in June and could end up boosting rates a total of three or perhaps four times this year. The dollar slipped against a basket of currencies.

"It is not enough to say that companies continue to be reluctant to lay off workers, they are becoming increasingly reluctant to do so", said John Ryding, chief economist at RDQ Economics in NY.

Strong wage growth and higher gasoline prices could fan inflation pressures. Gasoline prices led the increase, growing 3.0%.

Owners' equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, rose 0.3 percent last month after a similar gain in March. The rise in oil prices this week on the back of President Donald Trump's announcement he would pull out of the Iran nuclear deal drove up Treasury yields this week ahead of the CPI report. Because of the rise in oil prices, which broke $70 a barrel last week, consumers are paying significantly more for fuel than at this time a year ago. But in April, the cost of dining out actually rose slower than the cost of eating at home.

Among the categories where prices declined were airfares, new and used cars and trucks, and recreation. There were also decreases in the cost of airline tickets, new motor vehicles and communications.

Royce Mendes, senior economist at CIBC World Markets said that he expects the latest inflation data to weigh on a surging USA dollar, which should provide some near-term support for gold. The dollar fell after the report suggested inflation isn't flaring up in a way that would be troublesome for policymakers, despite higher freight costs, a 17-year low in the unemployment rate and tariffs that are burdening businesses.

For the month, gasoline prices rose 3.0% and are up 13.4% over the a year ago.

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