Gold News

Gold Slips with Oil & Stocks Ahead of "No Change" from the Fed Despite 27-Year Jump in Consumer Prices

From Chris Mullen at

Gold dropped to $898.40 by midday in London on Monday after climbing to $915.40 in Asia.

It then rallied back higher in early New York trade to trade near unchanged on the day, but Gold Prices fell back off again to a new low of $894.85 and ended almost $5 off that low with a loss of 1.03%, just shy of $900 per ounce.

The US Dollar index rose at one point and Treasuries eventually fell as oil dropped and a high inflation reading led some to speculate the Fed may be hawkish in their statement on Tuesday.

But few serious analysts expect any change in the Fed funds rate anytime soon and the Dollar ended unchanged on the day as a result.

Silver rose to $17.62 and fell to $17.215 before it also rallied back higher in early New York action and traded near unchanged, but it too fell back off to a new low of $16.878 and ended about 25 cents off that low with a loss of 1.83%.

The Gold Price in Euros fell to about €577, platinum lost another $84.50 to $1556, and copper fell roughly 14 cents to about $3.49.

Gold and silver equities steadily fell for most of trade and ended about 4% lower.

Oil fell to a three-month low under $120 at one point as storm fears eased, OPEC output was seen as rising, and US economic data indicated that higher energy prices have clearly cut into demand.

The Dow, Nasdaq, and S&P traded mostly slightly lower on inflation worries, but lower oil prices seemed to prevent stocks from seeing any significant losses.

On the data front, and according to the Fed’s preferred inflation measure, US prices spiked 0.8% in June, the most since 1981.

Adjusted for inflation, real personal spending fell 0.2% and real consumer spending is up just 1.2% from a year ago – the weakest performance during this business cycle.

Tuesday at 15:00 GMT brings the ISM Services report for July (expected at 48.7) and at 19:15 comes the Fed’s latest policy statement – expected to keep the fed funds interest rate unchanged at 2.0%.

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Chris Mullen is chief content manager of the GoldSeek family of websites, a leading source of gold news, comment and mining-stock data for private and institutional investors.

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