Gold riding a rollercoaster in Wednesday morning trading to regain a position well over $1,770. The yellow metal hit $1,778 an ounce earlier in the day on a weaker dollar, but CPI inflation data briefly dropped the bullion over $20 an ounce. Gold started the trading day steady, hovering around $1,760 an ounce, as investors awaited that key CPI inflation data for September for insight on the Federal Reserve’s stimulus tapering timetable.
Consumer prices jumped a bit more than expected for September, driven primarily by food and energy prices, the Labor Department reported Wednesday. The consumer price index for all items rose 0.4%. Economists polled by Dow Jones had forecast it to rise 0.3%, at the same pace as in August.
Minutes of the last meeting of Fed policymakers are also due out Wednesday afternoon and are likely to provide further cues on central bankers’ thinking.
December gold futures rose 0.2% Tuesday to settle at $1,759.30 an ounce on Comex, and the front-month contract gained 0.1% in the first two days of the week. Gold retreated 3.4% in September after gaining just 90 cents in August. It dropped $14.60 in the third quarter. The yellow metal is down 7.2% so far in 2021. Currently, the December contract is up $23.50 (+1.34%) an ounce to $1,782.80 and the DG spot price is $1,786.60.
Three Fed policymakers said Tuesday that the economy has likely recovered enough for the central bank to begin removing some of the supports implemented to get through the pandemic. The Federal Open Market Committee meets next in early November.
Fed Vice Chair Richard Clarida said Tuesday that the conditions required to begin tapering have “all but been met.” Atlanta Fed President Raphael Bostic and St. Louis Fed President James Bullard both also endorsed a November start to the tapering effort in separate remarks. Bostic acknowledged that the inflation surge is lasting longer than expected.
Separately, the International Monetary Fund cut its global and U.S. growth forecasts Tuesday and said that the Fed and other central banks should be prepared to respond to rising inflation by tightening monetary policy. An increase in interest rates is likely the best weapon that Fed policymakers have to rein in inflation. Gold is a traditional hedge against inflation — which is at a 30-year high — and an increase in rates would likely be bearish for the precious metal.
The IMF reduced its outlook for global growth for the year by 0.1 percentage point from its July estimate to 5.9%. It cut its U.S. forecast by 1 percentage point to 6%.
December silver futures decreased 0.7% Tuesday to settle at $22.51 an ounce on Comex. The front-month contract dropped 0.8% in the first two days of the week. Silver retreated 8.2% in September, its fourth consecutive monthly decline, and plummeted 16% in the third quarter. The metal is down 15% so far this year. Silver prices are tied to industrial demand. The December contract is up $0.446 (+1.98%) an ounce to $22.960 and the DG spot price is $23.10.
Spot platinum rose 0.5% Tuesday to $1,018.20 an ounce but is down 1.3% so far this week. The metal lost 5.3% last month and 10% last quarter. It’s down 5.2% so far this year. Currently, the DG spot price is up $15.20 an ounce to $1,035.10.
Spot palladium fell 2.7% Tuesday to $2,082.50 an ounce and down 0.6% so far this week. It lost 23% in September, 31% in the third quarter and is down 15% so far in 2021. The DG spot price is once again over $2,100 an ounce, jumping $29.70 to $2,102.50,
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