Gold & Silver Bounce from Oil-Led Drop; US Consumer Prices Jump at Quarter-Century Record Pace
From Chris Mullen at GoldSeek.com...
Gold and silver rose roughly 0.5% by about 09:00 in New York on Wednesday before they fell as low as $957.50 and $18.60 respectively just a little after 11am.
Both metals then rallied back higher into the close and ended with losses of 1.6% and 1.13%.
The Gold Price in Euros fell to about €607, platinum lost $50 to $1924.50, and copper fell nearly 5 cents to about $3.67.
Gold and silver equities fell over 3% by late morning before they rebounded a bit, but they still ended with over 2% losses.
On the data front, US consumer price inflation for June showed the highest monthly jump since 1982. While Net Foreign Purchases of US securities fell to just $67 billion in May, net overall US capital flows dropped from an inflow of $61.6 billion in April to a surprising outflow of $2.5 billion in May.
Oil added further to Tuesday's sharp losses after US stockpile inventories built more than expected across the board. Demand was reported to be 2% below last year’s level.
Crude inventories built 3.0 million barrels, gasoline inventories built 2.4 million barrels, distillate inventories built 3.2 million barrels, and refinery utilization rose 0.3% to 89.5%.
The US Dollar index rose and Treasury bond prices fell as open-market interest rates rose on the higher than expected CPI number.
The Dow, Nasdaq, and S&P also rose throughout most of trade and ended over 2% higher as oil fell markedly for the second day in a row and Wells Fargo came out with a better than expected earnings report and raised hopes about the health of the financial companies.
Newly released Federal Reserve minutes from their June 25th meeting – in which they held interest rates at 2.0% – meantime showed that members were increasingly worried about both a slowing economy and rising inflation. The battle over what do with interest rates intensified as a result, but with financial instability rising sharply in the three weeks since that meeting the market is no longer expecting any kind of interest rate hike anytime soon.
Previously, interest-rate futures expected an eventual increase of 50 basis points at the further end of the curve.
Thursday at 13:30 GMT brings Initial Jobless Claims for last week, expected at 380,000, plus Building Permits for June and Housing Starts, expected at 960,000.
At 15:00 GMT comes the Philadelphia Fed survey for July, expected at -15.0.
How best to Buy Gold today? For direct access to live Gold Prices online, cutting out the middleman and cutting your costs "dramatically" as the Financial Times puts it, go to BullionVault now...