Gold News & Info

Source:Dana Samuelson, American Gold Exchange

AustinGold and silver punched higher after the US reported the Producer Price Index on an annual basis fell 0.1%, from 1.9% in August to 1.8% in September. Core demand, which excludes food and energy, rose 0.2% on an annual basis from 2.6% in August to 2.8% in September. Month on Month final demand for services increased 0.2% while final demand for goods fell 0.2% MoM, netting out for a 0% change MoM. This reinforces the argument that inflation, while sticky now, will continue its modest downward trajectory, allowing the Fed room for future rate cuts.

Gold and silver reacted positively to the news in New York trading today with gold gaining 1.4% or $37 and silver gaining 1.6% or 51 cents at the close of the New York session. This puts gold and silver back into the center of the recent trading ranges they have established.

In late September gold peaked in the December futures contract at $2,708 and it bottomed this week at $2,618, before firming back up to $2,670 today. Silver peaked in early Oct. at $33.23 in the futures market, it bottomed out at $30.34 and ended the day back up to $31.57 in the futures market.

Metals were also boosted by comments made by Federal Reserve Bank of Chicago President Austan Goolsbee regarding future Fed rate cuts. Goolsbee indicated that the US economy had finally entered a period of normalcy following the volatility of the pandemic, and the post pandemic recovery period. With unemployment relatively low at around 4%, and inflation continuing to cool towards the Fed’s 2% target, Goolsbee said it was time to get the Federal Funds rate down from what he considers above normal.

“Taking the long view, inflation is way down,” he said. “While on the job-market side, it’s cooled from overly heated to something like steady state full employment…That would be a lovely picture that you would frame and put on the wall if you could freeze it, for dual mandate purposes. So, if that’s normal, the interest rate, in my view, is still well above where the steady state is.”

Meanwhile the world continues to wait for Israel’s response to Iran following what has been a relatively quiet week in Middle East turmoil. Israel’s response could come at any time.

At the New York spot close: gold gained $37.00 to $2,657.60; silver gained 51 cents to $31.52; platinum rose $17.45 to $985.15; and palladium eased $2.40 to $1069.80 an ounce.