U.S. consumer prices rebound less than expected in April

US wholesale prices up Just a tiny 0.1 percent in April

US PPI for final demand increases 0.1 pct in April

(Kitco News) - Gold prices have pushed to near session highs as USA inflation pressures remain muted.

The consumer-price index advanced 0.2% from the prior month after a March decline of 0.1%, a Labor Department report showed May 10, compared with the Bloomberg News survey median of a 0.3% gain. In the 12 months through April, the CPI increased 2.5 percent, the biggest gain since February 2017, after rising 2.4 percent in March.

Excluding the volatile food and energy categories, producer prices advanced 0.2% in April, matching economists' expectations.

Benchmark 10-year U.S. Treasury notes rose 8/32 in price to push yields down to 2.964 percent after breaching 3 percent on Wednesday.

USA consumer prices rose by less than forecast in April as costs for automobiles and airfares declined, reducing chances that inflation will run significantly above the Federal Reserve's target in coming months.

Last week after its monetary policy meeting the Federal Reserve suggested that it was comfortable with inflation rising above its 2% target.

Economists saw the slower increase in wholesale prices in April as a good sign that inflation is not getting out of control.

Last month's slowdown in wholesale price growth is likely temporary as manufacturers have been reporting paying more for raw materials.

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Last month, gasoline prices rebounded 3.0 per cent after tumbling 4.9 per cent in March.

Further increases are likely after crude oil prices jumped to three-and-a-half-year highs on Wednesday in the wake of US President Donald Trump's decision to pull the US out of an global nuclear deal with Iran.

Owners' equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, rose 0.3% last month after a similar gain in March.

In the 12 months through April, the core PPI rose 2.5 per cent after jumping 2.9 per cent in March. Prices for used cars and trucks tumbled 1.6% in April, the largest drop since March 2009.

Royce Mendes, senior economist at CIBC World Markets said that he expects the latest inflation data to weigh on a surging US dollar, which should provide some near-term support for gold.

For the year, the report said that annual headline inflation increased 2.5%, driven mostly by higher gasoline prices and rental costs.

This story has not been edited by Firstpost staff and is generated by auto-feed.

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