Gold gaining its power, PPI results higher than expected

Friday, 8 April 2011 03:02

After a long period with articles such as 'Gold is losing its shine', Gold is back with new high in the past four days raising at about 4.5% in less than a month.

The other precious metal, silver, has also gone up by much more than gold – raising about 30% during January February and March. 

Furthermore news, Producer price index data was released with higher than anticipated results.  The Producer price index rose to 0.9%, while a 0.6% was expected.  Anual readings of inflation of PPI gave out results of 14.6% while a 12.5% was expected.  This data shows that inflation in March has jumped.

Even though prices are rising, the decision by the Bank of England to keep interest rates the same at 0.5% has not changed.  The next interest rate decisions meetings will be held in May.

Due to the results released by PPI the British currency rose from its 1.6383 low to 1.6426 against the US dollar.

EUR/GBP fell to a low of 0.8763