Analyzing the Impact of US PPI on the XAUUSD pair today

The US Producer Price Index (PPI) is an important economic indicator that provides insights into trends in the prices of goods and services produced by manufacturers. A positive reading in the PPI indicates rising prices, while a negative reading indicates declining prices. Today, we will analyze the impact of a good US PPI on the XAUUSD pair.

Today’s given signal :

When the US PPI shows positive growth, it suggests that inflationary pressures are rising, which can make gold less attractive as an investment. Investors tend to seek alternative assets such as government bonds or stocks during times of rising inflation, leading to a decline in gold prices.

On the other hand, a weak US PPI reading can indicate deflationary pressures, which can drive gold prices higher. Investors often turn to gold as a hedge against inflation and as a means of preserving their wealth during times of economic uncertainty.

Producer Price Index Formula

PPI = current price of basket/base price of basket

We can see from the above formula, that the price of the basket is getting calculated based on the present price and the base price which was decided by the producer. As the meaning of PPI lies in the price by producer. So, to calculate it, we need a base year. In economics, we name the base year Index as “Laspeyres index”. We denote the quantity in the base year as q0 and the same quantity in the present situation as qt, the base price of the product in the base year as po and the present price of the product as pt.

PPI (Laspeyres) = (∑q_0 × p_t)/(∑q_0 × p_0 ) x 100


q0 = quantity in the base period

p0 = price of the product in the base period

pt = price of the product in the current year

Now, we also know that the PPI can be measured on the basis of prices of the current year of commodities. Such an index is known as the Paasche index.

PPI (Paasche) = (∑q_t × p_t)/(∑q_t × p_0 ) x 100


q0 = quantity in the base period

qt = quantity in the current year

p0 = price of the product in the base period

pt = price of the product in the current year

There’s also a combination of both these indices, known as the Fisher index.

PPI (Fisher) = √(Laspeyres Index X Paasche Index)

To get a sense of inflation in the economy of a country, various agencies cluster this data, such as the Bureau of Labor Statistics in the US. 

Consumer prices differ from producer prices based on the CPI (Consumer Price Index). PPI stands for producer price index, whereas CPI stands for consumer price index, which is used to measure inflation in an economy. Thus, CPI is used as a measure of inflation in the economy. In the CPI, all taxes imposed after a product is introduced to the market are included. Indicating the price paid by the customer to acquire something is why the CPI is used as the usual indicator of inflation in the economy. PPI measures the amount of money needed to produce an item and its output by the producer.

Previous released data results :

On last PPI data (12-1-2024) we predict to SELL XAUUSD as for higher PPI Data was created pressure on gold so price was fall.

Check the previous blog :

Check last given signal :

Performance :

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