Gold and silver futures ended lower for the first time in three sessions after a report showed flat U.S. inflation and ahead of the Fed’s monetary policy statement.
Gold for February delivery fell $14.30, or 1.1%, to finish at $1,230.10 an ounce on the Comex division of the New York Mercantile Exchange. Gold futures climbed 0.8% over the prior two sessions.
Earlier Tuesday, a report from the U.S. Labor Department showed that inflation was flat in November. Historically, gold has been purchased as hedge against inflation.
"Metals markets need to see some inflation before they can rally because they’ve lost their appeal as an inflation hedge," Chris Gaffney, the senior market strategist at EverBank Wealth Management in St. Louis, said in a telephone interview according to Bloomberg News. "That’s taken a lot of buyers out of the market."
Also reported by the Labor Department, inflation increased 1.2% over the past 12 months compared to 1% previously. But core annual inflation, which strips out volatile food and energy prices, rose 1.7% for a third straight month. That remains below the 2% Fed target rate, offering policy-makers a reason to go easy on or even delay tapering. If there is a delay, that could spark a short term rally for gold and silver as more investors have been expecting some level of tapering.
"While the prospect of an immediate taper seems to be diminishing for now, it seems only inevitable that the Fed will act sooner rather than later, and the longer-term investors are still being seen to reduce their exposure to gold as a result," Reuters quoted a trader at TD Securities’ precious metals desk.
Tuesday kicked of the two-day Federal Open Market Committee (FOMC) meeting with its monetary policy statement due Wednesday afternoon.
In other precious metals, silver for March delivery slid 26 cents, or 1.3%, to $19.84 an ounce, trading between $19.68 and $20.23. Silver prices surged 2.5% over the previous two sessions.
Finally, in PGM future prices on Tuesday:
January platinum fell $15.50, or 1.1%, to $1,344.60 an ounce, extending its losing streak to five sessions. Platinum prices ranged from $1,342.90 to $1,365.
- Palladium for March delivery tumbled $15.30, or 2.1%, to $701.05 an ounce after inching up 15 cents in the prior session. Palladium traded between $698.40 and $720.75.
London Fix Precious Metals
London precious metals fixings were mixed. In contrasting the Monday PM to Tuesday PM London fix prices:
- Gold shed $3, or 0.2%, to $1,231.75 an ounce,
- Silver tacked on 52 cents, or 2.7%, to $20.02 an ounce,
- Platinum dipped $1, or 0.1%, to $1,354 an ounce, and
- Palladium fell $4, or 0.6%, to $713 an ounce
US Mint Bullion Sales in December
Sales totals for United States Mint bullion coins were unchanged for a second consecutive day, according to figures on the bureau’s website. Listed below are U.S. Mint bullion sales for the month through Dec. 17 and the year-to-date.
|American Eagle and Buffalo Bullion Sales (# of coins)|
|Tuesday / Week-To-Date Sales||Last Week||December Sales||YTD Sales|
|$50 American Eagle Gold Bullion Coins||0||11,000||30,000||720,000|
|$25 American Eagle Gold Bullion Coins||0||0||0||58,000|
|$10 American Eagle Gold Bullion Coins||0||4,000||4,000||122,000|
|$5 American Eagle Gold Bullion Coins||0||0||15,000||535,000|
|$50 American Buffalo Gold Bullion Coins||0||4,000||5,500||237,500|
|White Mountain 5 oz. Silver Bullion Coins||Sold Out||35,000|
|Perry’s Victory 5 oz. Silver Bullion Coins*||0||2,900||2,900||30,000|
|Great Basin 5 oz. Silver Bullion Coins*||0||1,400||1,400||30,000|
|Fort McHenry 5 oz. Silver Bullion Coins||Sold Out||30,000|
|Mount Rushmore 5 oz. Silver Bullion Coins||Sold Out||35,000|
|American Eagle Silver Bullion Coins||0||800,000||1,200,000||42,675,000|
*Perry’s Victory and Great Basin silver bullion coins sold out on Tuesday, Dec. 10. The U.S. Mint will not have America the Beautiful Five Ounce Silver Bullion Coins to sell until the first 2014-dated strike is released in late January.