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Gold Ends Unchanged, Silver Adds 0.5%, as Data Hits Stocks & Bonds Ahead of Fed Rate Decision

From Chris Mullen at

Gold and silver saw slight gains in early Asian trade and then fell back off to see about 1% losses in London.

Bouncing from $1111.50 and $17.09 an ounce respectively, the Gold Price and silver rose to see modest gains in New York as high as $1127.50 and $17.43 by about 10:30 EST.

Gold and silver then dipped back into negative territory midday, but ultimately rallied back higher in afternoon trade, gold ended with a loss of less than 0.1% while silver ended with a gain of 0.5%.

The Gold Price in Euros rose to €773 on Euro weakness.

Crude oil climbed back above $70 as the Opec oil cartel lifted its demand view and traders looked forward to an expected supply drop in Wednesday’s US inventory reports.

The US Dollar index rose and Treasuries fell after higher than expected US wholesale price data raised the possibility that the Fed may start raising interest rates sooner then previously expected.

Producer Prices rose 1.8% in November, more than twice as fast as analysts forecast. Ex-oil and food prices, wholesale price inflation hit 0.5%, almost reversing Oct.'s drop.

The Treasury's TIC capital flows report showed a net change in foreign ownership of US assets of $20.7 billion for Oct., half the pace accumulated in Sept. and well below expectations.

The Empire Manufacturing index sank to +2.55 from +23.51 last time around, but Industrial Production showed an increase, as did US capacity utilization, creeping higher to 71.3%.

The Dow, Nasdaq, and S&P traded mostly slightly lower on worries over inflation and higher interest rates.

Platinum gained $4 to $1440, and copper fell slightly to about $3.12.

Gold Mining and silver equities steadily fell for most of trade and ended with about 2% losses.

Wednesday at 08:30 EST brings US Building Permits for November expected at 570,000 and Housing Starts expected at 578,000.

Consumer Price Inflation for November is expected at 0.4%, with Core CPI expected at 0.1%.

The third quarter Current Account Balance is forecast at minus $107.5 billion, while the Federal Reserve's Rate Decision at 14:15 EST is not expected to announce any change from the current recent 0.00-0.25% range.

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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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