Gold and Silver Little Changed as US Inflation Rises


Fine Gold BarsUS gold and silver prices were nearly unchanged Wednesday. The two metals held firm despite a surging dollar and plunging crude oil prices.

Greek bailout issues lifted safe-haven buying, opined analysts, as the euro fell against the dollar. Higher than expected US inflation data was also somewhat supportive for gold and silver prices.

August gold prices rose $1.80, or 0.1 percent, to $1,526.20 an ounce on the Comex in New York. They ranged from a low of $1,514.50 to a high of $1,535.70. Gold prices have gained 7.4 percent in 2011.

"We’ve got a tug of war in gold," Frank Lesh, a trader at FuturePath Trading LLC in Chicago, was quoted on Bloomberg. "If you’re holding gold in dollars, you’re selling into the rallies. If you’re holding gold in euros, you’re buying the dips."

The Labor Department on Wednesday said US inflation rose 3.6 percent in the past year, which is the highest level since October 2008. Core US inflation, which excludes volatile food and energy prices, rose 0.3 percent in May to mark the biggest increase since July 2008. Historically, gold has been a hedge against inflation. (See the inflation calculator to see how the value of money has changed over time.)

Silver prices for July delivery treaded down one-tenth of a cent to $35.410 an ounce. Silver traded between $34.810 and $35.975. Silver prices have climbed 14.5 percent this year. Jim Wyckoff of Kitco Metals Inc. noted the following on Wednesday in regards to the white metal:

"July silver futures prices closed near mid-range Wednesday. Silver bulls have the slight overall near-term technical advantage, but still need to show more power soon to keep that advantage.

The next downside price breakout objective for the bears is closing prices below solid technical support at the May low of $32.30. Bulls’ next upside price objective is producing a close above solid technical resistance at last week’s high of $37.86 an ounce.

First resistance is seen at $36.00 and then at $36.50. Next support is seen at $35.00 and then at Wednesday’s low of $34.81. Wyckoff’s Market Rating: 5.5."

Platinum prices for July delivery ended down $20.70, or 1.2 percent, to $1,774.20 an ounce. The metal hit an intraday low of $1,772.20 and a high of $1,804.00. It has fallen 0.2 percent in 2011.

Palladium prices for September delivery declined $16.75, or 2.1 percent, to close at $776.00 an ounce. Palladium ranged between $774.40 and $799.95. Palladium is down 3.4 percent this year.

London precious metal prices were mixed, as gold and silver rose while platinum and palladium fell. When comparing London fix prices on Wednesday (PM) from those on Tuesday (PM), gold added $13.75 to $1,529.75 an ounce, silver rose 58.0 cents at $35.260 an ounce, platinum declined $12.00 to $1,784.00 an ounce, and palladium lost $9.00 at $785.00 an ounce.

United States Mint published bullion coin sales show a daily 65,000 increase for the American Silver Eagle. All other bullion tallies remained unchanged. The latest Mint numbers follow:

US Mint 2011 Bullion Coin Sales
Gold Eagle Coin (1 oz.) 0 29,500 481,000
Gold Eagle Coin (1/2 oz.) 0 0 55,000
Gold Eagle Coin (1/4 oz.) 0 0 56,000
Gold Eagle Coin (1/10 oz.) 0 20,000 235,000
Gold Buffalo Coin (1 oz.) 0 0 74,000
Silver Eagle (1 oz.) 65,000 1,682,000 20.5835 M
ATB Silver Bullion (5 oz.)* 0 0 326,800

*ATB Silver bullion coin sales figures are not published by the Mint daily. The current figure has an "as of date" of more than two weeks ago (Thursday, May 26).

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