US gold futures rose Tuesday morning after October's producer price index posted the biggest jump in 15 years, but futures just missed a new 16-year high, with little follow-through buying for inflation hedges.
"It's all dollar-related - PPI came out," a bullion trader said.
The Labour Department said pipeline inflation rose 1.7 percent last month, the largest increase since January 1990. The market was looking for a 0.5 percent jump after September's tame 0.1 percent increase. Subtracting food and energy prices, the PPI went up 0.3 percent.
December gold rose to $440.40 an ounce, just off Monday's peak at $440.60, before trimming gains when the struggling dollar steadied against the euro.
At 10:08 am EST the contract was up $2.90 at $440.20 an ounce on the New York Mercantile Exchange's COMEX division, after setting an overnight low of $436.20.
"The euro has come back off and the Aussie dollar has come back off, so they are starting to pull back on the gold a bit here," said a floor broker.
The Commodity Futures Trading Commission's commitments of traders report, released a day late on Monday due to last week's Veteran's Day holiday, showed the net speculative long position in gold increased to 117,853 lots from 111,437 contracts in the week to November 9.
Spot gold fetched $437.75/8.50, up from $436.45/7.20 at Monday's close. The morning fix was $437.95.
December silver was off 3.7 cents at $7.535 an ounce, trading from $7.62 to $7.48. Spot was at $7.50/53, off from $7.53/56. The fix in London was $7.5050.
January platinum was off $10.30 at $867 an ounce. Spot platinum was at $865/870. December palladium was up 70 cents at $220.20 an ounce. Spot palladium hit $216.00/220.00.
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