U.S PPI Slightly Rose in January – February Report

According to the latest producer price index report, which was published today,
the PPI for finished goods slightly increased by 0.1% January compared with
December. This report serves as an indicator for the direction of the U.S core
CPI to be published tomorrow, February 17th. During January the food index
slightly decreased by 0.3%. During the month, the energy index also declined by
0.5%. Nevertheless, on an annual scale, the PPI increased by 4.1% during the
past 12 months The Producer Price index excluding food and energy rose by 0.4%
during January 2011. This PPI ex food and energy is estimated to have a lagged
negative linear correlation with gold price; i.e. as the PPI increases, gold
price tends to decrease the following day. Furthermore, the PPI excluding food
and energy has a positive linear correlation with silver price. These relations
are mainly via the developments in U.S dollar.