Gold Up for Sixth Time in Seven Sessions with Mixed Inflation

Gold coins and inflation
Gold and silver climbed for a second straight session. Inflation played a small part in gains.

Gold advanced for the sixth time in seven sessions Tuesday, buoyed by a weaker U.S. dollar, new inflation data and ahead of Fed chairman Ben Bernanke’s congressional testimony.

Gold for August delivery settled up $6.90, or 0.5%, to $1,290.40 an ounce on the Comex in New York. The settlement was the highest price for gold since it ended at $1,292.00 an ounce on June 21. Gold prices traded from an intraday low of $1,275.60 to a high of $1,294.70.

Early Tuesday, the US Labor Department reported that consumer prices advanced 0.5% in June for the biggest increase since February and that the annual inflation rate rose to 1.8% for the largest gain since March. Historically, gold has been purchased as a hedge against inflation. But these figures were not cited as specifically supporting gold. Instead, more bullish credit was given to the turn in core inflation, which excludes volatile food and energy prices. It rose 1.6% on a year-over-year basis compared to 1.7% previously. That is below the Federal Reserve’s 2% target and it is also the smallest 12-month increase in two years, which pointedly offers the Fed more time for its easing policies.

"The CPI figure is lower than what the Fed wants, so the gold market sees this as tapering is further away," Reuters quoted Carlos Perez-Santalla at brokerage Marex Spectron.

Bernanke’s testimony before Congress begins on Wednesday. Bullion traders will be looking for further signals on where the central bank is heading.

"The market’s anticipation that Mr. Bernanke will continue to emphasize his earlier views on easy monetary policy may help lift gold prices, we believe," HSBC analysts James Steel and Howard Wen wrote in a note late Monday, according to MarketWatch.

In other precious metals futures in New York on Tuesday:

  • Silver for September delivery gained 9.6 cents, or 0.5% to $19.94 an ounce, ranging from $19.66 and $20.05. It also marked a streak of five gains in six sessions.

  • October platinum inched up $3.70, or 0.3%, to $1,425.10 an ounce, trading between $1,413.40 and $1,434.90.

  • Extending its winning streak to seven sessions, palladium for September delivery rose $3.45, or 0.5%, to $735.60 an ounce. Palladium ranged from $727 to $737.25.

London Fix Precious Metals

London precious metals fixings advanced as well. In contrasting the Monday PM to Tuesday PM London fixings:

  • Gold climbed $6.75, or 0.5%, to $1,291.50 an ounce,
  • Silver rose 13 cents, or 0.7%, to $19.95 an ounce,
  • Platinum gained $16, or 1.1%, to $1,426 an ounce, and
  • Palladium surged $11, or 1.5%, to $735 an ounce

US Bullion Coin Sales in July

Sales totals for United States Mint bullion products were unchanged Tuesday. Reported gains on Monday were exceptionally strong for silver coins and modest for gold coins. The following table offers daily, July and year-to-date bullion coin totals as published by the U.S. Mint on its website.

American Eagle and Buffalo Bullion Coin Sales
  Tuesday Sales Last Week Week-To-Date Sales July Sales YTD Sales
$50 American Eagle Gold Bullion Coins 0 5,000 0 20,000 564,500
$25 American Eagle Gold Bullion Coins 0 0 0 4,000 47,000
$10 American Eagle Gold Bullion Coins 0 2,000 0 4,000 90,000
$5 American Eagle Gold Bullion Coins 0 0 5,000 20,000 435,000
$50 American Buffalo Gold Bullion Coins 0 6,000 1,500 13,000 174,500
White Mountain 5 oz. Silver Bullion Coins 0 800 0 1,800 28,800
Perry’s Victory 5 oz. Silver Bullion Coins 0 2,400 0 3,400 17,600
Great Basin 5 oz. Silver Bullion Coins 0 2,000 1,200 7,500 17,400
American Silver Eagle Bullion Coins 0 830,500 875,000 2,531,500 27,575,000


Figures above are in the number of coins sold, not in ounces.

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