Updated from 10:50 a.m. EDT with EverBank comment

NEW YORK ( TheStreet) -- Gold prices were bumping higher on Friday after a report said inflation unexpectedly rose in May.

Gold for August delivery at the COMEX division of the CME was gaining $8.90 to $1,386.70 an ounce. The gold price traded as high as $1,391.80 and as low as $1,377.80 an ounce, while the spot price was rising 99 cents.

The Bureau of Labor Statistics reported Friday that producer price index headline inflation for May rose 0.5% month-over-month, which was higher than the 0.1% rise economists polled by Thomson Reuters had expected. The report attributed the rise to higher food and energy prices. Gold prices popped off the flatline shortly after the report printed.

Gold prices dropped 1% on Thursday after a basket of economic factors weighed on the yellow metal.

Gold ticked higher in late-afternoon trading on Thursday -- electronic trading that followed settlement on the New York Mercantile Exchange -- after the Wall Street Journal reported that the Federal Reserve isn't near raising short-term interest rates. The move higher suggested that traders had made bets the Fed wouldn't curb its monetary stimulus program, which has boosted inflation concerns since the 2008 global financial crisis.

Investors often view gold as a hedge against inflation.

"Obviously the Fed's the biggest game in the news right now," Frank Trotter, president of EverBank Direct, said in an interview from St. Louis. "I think certainty is the game we aren't seeing at all here in the middle of the year."

Silver prices for July delivery was climbing 37 cents to $21.96 an ounce, while the U.S. dollar index was moving alongside gold prices into higher territory by 0.1% to $80.80.

The consumer price index will report inflation for consumers on Tuesday as Fed bankers convene for its latest policy-making meeting. Fed Chairman Ben Bernanke and many other central bankers have shown little concern for higher inflation, but a tick up in CPI coupled with Friday's rise in PPI could offer some pause.

Investors and traders, though, will be focusing on the Fed's policy statement, economic projections and press conference that emerge Wednesday. Speculation has continued to mount as to whether the Fed will taper its monthly purchases of mortgage-backed securities and longer-term Treasuries.

Though many economists and analysts are not expecting central bankers to pull back on the programs, such a move could be seen as anti-inflationary and a signal that the economy is moving decidedly higher. This would take a bite from gold prices.

EverBank's Trotter said gold prices have found a range to trade in ahead of the Fed meeting, and said he expects the yellow metal to trade near its current price until the central bank acts or a global event occurs.

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