The cost of living in the US rose more than expected in October, as the price of fuel, food and cars helped drive costs higher, according to a Labor Department report released Wednesday.

Consumer prices rose 0.3 percent in the month after a 0.2 percent increase in September, according to the latest Consumer Price Index (CPI) data. Many analysts were expecting a 0.2 percent increase, according to reports.

Core inflation, which exclude volatile food and energy costs, rose by 0.2 percent.

"I don’t see anything in the report that suggests there’s any real inflation flare-up," Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, said on Bloomberg. "The Fed is comfortably on hold."

Annual US inflation fell 0.2 percent. Core 12-month inflation rose 1.7 percent after a 1.5 percent rise was noted in September. The reading is within the Federal Reserve’s 1 percent to 2 percent comfort zone, although it is approaching the upper boundary. Read the rest of this entry »

Good Day,

Today’s market news and analysis roundup begins with the -by now- ‘normal’ observance of yet another price record having been achieved by gold. During the hours preceding the New York session’s opening, spot gold touched the $1150 level (plus 30 cents) as the US dollar broke under the 75 mark on the trade weighted index once again. The metal remains overbought and continues to dart around in uncharted territory. Other commodities also climbed, with oil rising back towards $80 a barrel and copper to 13-1/3 month highs near $7,000 a tonne, as the US currency traded at 1.493 against the euro. This morning’s main trading focus was on US CPI figures and US housing starts.

Gold traders were looking for CPI-based clues as to the next direction of trade, both due to its effect on the currency markets and on bullion itself, which is often seen as an inflation hedge. But, at this juncture, we rather feel that any news is translated into "bullish-eze." "Low inflation pressures are traditionally a negative for gold prices," said HSBC analyst James Steel in a market note. "If, however, weak inflation data are seen as allowing the Fed to continue to pursue easy monetary policies, this may be seen as supportive of gold."

As it turns out, inflation figures came in higher than expected, rising 0.3% - driven mainly by an increase in energy and commodity prices. Core CPI was seen at 1.7% over the past year. The inflation data should of course help gold, but the dollar turned up slightly after the news release, although sources we polled were not sure whether to point at the inflation numbers or the very poor housing starts figures. Read the rest of this entry »

Of Quads and a Moscow Hold’em

Good Day,

Overnight trading markets gave early indications that the first day of the new week might present a fresh record for gold prices (while also making life interesting in the oil trading pits), and that the US dollar would likely return to the pivot points it first visited in October (75 on the index and $1.50 against the euro). Following that, the New York spot markets opened with additional gains in precious as well as base metals, and oil. Since the day will be filled with travel once again, we can offer up only the starting gate numbers and a second half consisting of a roundup of background stories that were ‘canned’ prior to this morning. Today’ late developments will have to be covered in retrospect.

Gold opened with a $12.20 per ounce rise, and was quoted at $1110.00 this morning. Silver added 33 cents to start Monday’s session at $17.72 an ounce. Platinum rose $12 to $1355 and palladium climbed $2 to $331 per ounce. Rhodium remained unchanged at $1850 the troy ounce. Also at last check, the US dollar was seen at 75.05 on the index and oil was still up by $1.13 at $78.56 per barrel. Hurricane Ida was certain to be among the factors cited for black gold’s rise this morning, but the core reasons remain the ones you will read about below. Read the rest of this entry »

Class Is Now In Session

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Speculation early this morning was that U.S. employers likely have cut only 150,000 jobs in the month of October, a figure which would be the lowest in more than a year. The worst labor-market slump since the 1930s is now seen as possibly bottoming out, and the possibility of future consumer spending is now seen as adding to US and global economic growth.

The actual numbers, however showed a bit of a different reality, as the U.S. economy shed 190,000 jobs last month, lifting the unemployment rate above the 10% mark (to 10.2%) for the first time in 26 years, the Labor Department said. Economists were looking for the unemployment rate to rise to 9.9%

Following yesterday’s brief pause and minuscule retracement, gold prices remained within striking distance of the $1100 level early this morning, as speculative interest was banking on Friday’s US jobs report to yield further fuel for what has now become a routine spec fund-driven play. That is, when/if economic news is good, the dollar sinks and risk appetite reignites on the perception that such good news will drive the Fed to keep handing out essentially free money with which to go out and buy… stuff. Read the rest of this entry »

New York gold futures reached a fresh all-time high on Wednesday after the Federal Reserve kept interest rates and its monetary policy unchanged, which helped push the US dollar lower and made the yellow metal more attractive. Silver and platinum followed along, as did crude oil. For a second straight day, US stocks closed mixed.

New York precious metal figures follow:

• Silver for December delivery rose 22.5 cents, or 1.3 percent, to $17.405 an ounce. It ranged from $17.105 to $17.635.

• Gold for December delivery advanced $2.40, or 0.2 percent, to $1,087.30 an ounce. It ranged from $1,080.50 to $1,098.50.

• January platinum climbed $13.10, or 1.0 percent, to $1,369.30 an ounce.

Read the rest of this entry »

A Turkey for Turkey, The UK Lays an Economic Egg, and Russia Sells…Gold?!

Good Day,

Gold prices continued to remain ‘in the zone’ (the $1040-$1070 zone, that is) overnight, with little in the way of fresh market-impactful news making their way into the media stream. The US dollar remained at or very near the 1.50 pivotal level against the euro, but climbed away from the 75-mark on the trade-weighted index. Oil prices hovered just above $81.25 per barrel, while a lackluster session in the Nikkei ended with tiny gains.

New York spot metals dealings opened on a mixed note this morning, as pre-weekend book-squaring and dollar gains made for a bit more than the recently witnessed –and practically daily-one-way fund buying spree. Gold started the Friday session at $1060.00 exactly, basis spot bid, a gain of $0.20 per ounce, as against a tick at the 75.29 level by the dollar on the index. Today’s ‘to watch’ agenda contains US existing home sales data, and a Bernanke speech in Boston. Also keep an eye on closing levels - this is now the fourth week of potential gains before the tally is over. Read the rest of this entry »

The cost of living in the US rose slower in September, easing concerns of higher inflation which over the past 12 months has fallen more than one percent, according to a Labor Department report released Thursday.

Consumer prices edged higher last month by 0.2 percent, following a 0.4 percent climb in August. Core consumer prices, which exclude volatile food and energy costs, also rose by 0.2 percent.

"Today’s figures won’t shift the argument about inflation risks at the Fed. They don’t show deflation, but nor do they show sufficient inflation pressures to make the doves want to tighten soon," Nigel Gault, chief U.S. economist at IHS Global Insight in Lexington, Massachusetts, was quoted on Reuters.

Annual US inflation fell 1.3 percent. Core annual inflation rose 1.5% from September 2008 following the 1.4% increase in the 12 months ending in August. Read the rest of this entry »

The cost of living in the US increased slightly in August, but prices were cheaper compared to 12 months ago, a new report released Wednesday by the Labor Department reveals.

Annual US inflation dropped 1.5 percent after a 2.1% decline in the 12 months ending in July. The decrease was largely due to lower gasoline costs as compared to the spiked prices from last summer.

When volatile food and energy prices were excluded, the 12-month core rate increased 1.4 percent — still, it is the smallest year-over-year gain since February 2004

The Consumer Price Index, which is the government’s most closely watched barometer for measuring inflation at the consumer level, climbed 0.4% in August. The rate increase was driven by a 9.1 percent surge in gasoline prices. Read the rest of this entry »

The cost of living in the US remained unchanged in July while annual inflation fell the most since January 1950, or nearly 60 years, the Labor Department reported Friday.

The government’s Consumer Price Index shows year-over-year inflation declined 2.1%, cut down by sharply lower energy costs as compared to last year when gasoline prices were over $4 a gallon. July prices were also held in check by falling energy prices.

“In the months ahead, we expect U.S. consumer prices to soften further, and headline consumer price inflation to remain in negative territory (at least through to some time in the fall), before beginning to creep above zero as the expected economic recovery gathers traction,” Millan Mulraine, economics strategist with TD Securities, in a research note, was quoted on MarketWatch.

Core consumer prices, which exclude volatile food and energy costs, rose by 0.1 percent in July. The core CPI is up 1.5 percent over the past year, which is well within the Federal Reserve’s comfort zone of 1-2 percent. Read the rest of this entry »

It was a banner day Wednesday for precious metals, oil and U.S. stocks. Gold briefly climbed above $941 and silver topped $13. In the end, the yellow metal retreated from its intraday high but still closed to its best level in nearly two weeks. Platinum advanced as well while crude-oil broke a three-day losing streak on news of increased demand from refiners. U.S. stocks rallied with all three major indexes rising at least 3 percent.

In New York trading futures for bullion:

• Silver for September delivery jumped 35.3 cents, or 2.7 percent, to 13.208 an ounce.

• Gold for August delivery rose $16.60, or 1.8 percent, to $939.40 an ounce.

• October platinum gained by $22.80, or 2.0 percent, to $1,157.90 an ounce.

Read the rest of this entry »