Gold Settled Above $4,400 per Ounce as Mild US Price Data Eases Pressure
A tamer-than-expected inflation report (3.4% CPI YoY) powered the metals complex higher on Wednesday, sending gold to a two-month peak as silver sprinted ahead even faster.
Spot gold climbed to a new local high to $4,435 per ounce today, before finally settled slightly higher than $4,400 after the end of New York trading session. Silver did even better. Spot silver settled at $65.30 after the end of today's trading session, with a 0.79% increase in the past 24 hours alone.
The day's trigger was the cost-of-living data. July's CPI figure crept up 0.1% from June and 3.4% from a year ago, exactly matching the median in a Bloomberg poll of economists. The core measure, which omits food and energy, rose 0.2% on the month and 2.5% annually, the softest yearly pace since March 2021, marking the second mild report in a week following a surprise 23,000 decline in US payrolls.
Rate markets dialed back their expectations. Traders still assign about 40% odds to a September hike, but the likelihood of an October increase slipped to roughly 60% from 75% a day earlier, with December now seen as the probable date for the next move. Two-year Treasury yields, the maturity most responsive to policy bets, fell three basis points to 4.18%, and the dollar was little moved. Since bullion pays no interest, it fares better when tightening stalls.
Equities have far outpaced the metals though. GDX and GDXJ, two popular gold miner ETFs, have been going up by 8.7% and 9.14% respectively in the past one week alone. The situation around inflation has been truly helping equities to keep going higher.
CME Group, separately on another news, plans to launch round-the-clock trading in its 100-ounce silver futures in September pending regulatory approval, bringing silver the same continuous access it introduced for 1-ounce gold contracts in late July. This will help metal lovers to get more options when it comes to gold and silver trading options.
Related assets: Gold, Silver, Palladium, Platinum