Gold prices fell Wednesday amid further signs that inflation is heating up.
Producer prices in the U.S. increased by slightly more than expected in the month of June, according to a report released by the Labor Department on Wednesday, with the annual rate of price growth accelerating to its highest level in over six years.
The Labor Department said its producer price index for final demand rose by 0.3 percent in June after climbing by 0.5 percent in May. Economists had expected prices to edge up by 0.2 percent.
Chicago Fed President Charles Evans, considered a dovish policy maker compared to his colleagues, is now in favor of raising interest rates. He tells the WSJ: "The economy seems so strong it seems natural that businesses and consumers can live with" slightly higher rates."
The Bank of Canada on Wednesday raised their key interest rate despite concerns that trade tensions could hurt the global economy.
The BoC increased its target for the overnight rate to 1 1/2 per cent. The Bank Rate is correspondingly 1 3/4 per cent and the deposit rate is 1 1/4 per cent.
The Bank expects the global economy to grow by about 3 3/4 per cent in 2018 and 3 1/2 per cent in 2019, in line with the April Monetary Policy Report (MPR).
August gold fell $11, or 0.9%, to settle at $1,244.40 an ounce, the lowest for since July 2. Copper plunged to a 1-year low.