Gold price pressure after U.S. PPI data

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Gold prices were modestly lower on Thursday after data showed that U.S. inflation pressures remained in check last month.

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The Labor Department said its producer price index (PPI) fell 0.1 percent in January after edging up 0.1 percent in December. 

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Excluding the volatile food and energy components, so-called core producer prices also dipped 0.1 percent.

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Analysts had expected both the overall and core PPI to rise 0.2 percent in January.

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Inflation has been surprisingly subdued in recent months despite a tightening labor market, which is typically associated with higher wages and price pressures.

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The lack of inflation pressures has allowed the Federal Reserve to keep interest rates at historically low levels, which has been a tailwind for gold prices.

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The central bank is widely expected to leave rates unchanged at its meeting next week, 

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But investors will be closely watching the accompanying statement and press conference for any clues on the timing of future rate hikes.

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These bars are typically produced by private mints and have a lower purity than coins. 

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Gold prices are down about 1 percent so far this year as the dollar has regained some lost ground and stocks have continued to march higher.

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