Gold Snaps Winning Streak Even as US Inflation Rises Sharply

Inflation and Gold Coins
Gold fell even as a report showed sharply higher inflation in the US

Gold prices retreated Tuesday for the first time in seven sessions and from a three-week high even as a report showed US inflation rose sharply in May.

Gold for August delivery dipped $3.30, or 0.3%, to finish at $1,272 an ounce on the Comex division of the New York Mercantile Exchange. The precious metal traded from an intraday low of $1,258 to a high of $1,273.50.

"Gold prices extended early losses in the immediate aftermath of a ‘hotter-than-expected’ monthly U.S. inflation report released early Tuesday morning," Jim Wyckoff, a senior analyst at Kitco Metals Inc., said in a report.

"The gold selling was based upon ideas the CPI figure would embolden the Federal Reserve to continue on its path of ‘tapering’ its quantitative easing of monetary policy. However, gold prices quickly recovered the ground lost after the CPI report, and then gained some more, when traders realized a hot CPI report could actually be bullish for the gold market."

The Labor Department on Tuesday said the Consumer Price Index (CPI) advanced 0.4% in May and inflation jumped 2.1% in the past 12 months. The annual US inflation rate is the highest since October 2012. Historically, gold is seen as a hedge against inflation.

To see how inflation has changed the buying power of the US dollar over time, use this site’s Inflation Calculator.

In rounding out the precious metals complex:

  • Silver has advanced in 11 of the last 12 sessions. Silver for July delivery inched up less than 2 cents, or 0.1%, to $19.73 an ounce, ranging from $19.44 to $19.74.

  • July platinum added $4, or 0.3%, to $1,443.10 an ounce, trading between $1,426.10 and $1,443.80.

  • Palladium for September delivery rose $7.35, or 0.9%, to $816.70 an ounce, ranging from $808 to $819.05.

London Fix Precious Metals

Earlier fixed London precious metals moved lower. In contrasting London fix prices from Monday PM to Tuesday PM:

  • Gold lost $8.75, or 0.7%, to $1,267.50 an ounce,
  • Silver dropped 12 cents, or 0.6%, to $19.55 an ounce,
  • Platinum declined $14, or 1%, to $1,427 an ounce, and
  • Palladium slipped $4, or 0.5%, to $810 an ounce

US Mint Bullion Sales in June

Sales of United States Mint bullion products advanced by 7,500 ounces in gold coins and 430,000 ounces in silver coins. In a notable, Silver Eagle sales for the year topped the 23 million marker at 23,206,500. It is the second quickest pace ever for the coins, behind last year. Silver Eagles sales through the same time frame in 2013 reached 24,028,000.

Below is a sales breakdown of U.S. Mint bullion products with columns listing the number of bullion coins sold last week, last month, the month so far, and the year-to-date.

American Eagle and Buffalo Bullion Sales (# of coins)
Tuesday / Week-To-Date Sales Sales Last Week May Sales June Sales YTD Sales
$100 American Platinum Eagle Bullion Coins 0 200 1,000 700 12,900
$50 American Gold Eagle Bullion Coins 4,000 7,000 29,000 21,500 177,000
$25 American Gold Eagle Bullion Coins 0 0 3,000 0 25,000
$10 American Gold Eagle Bullion Coins 0 0 6,000 0 68,000
$5 American Gold Eagle Bullion Coins 0 5,000 35,000 15,000 340,000
$50 American Buffalo Gold Bullion Coins 3,500 2,000 12,500 9,000 104,500
$1 American Eagle Silver Bullion Coins 425,000 675,000 3,988,500 1,770,000 23,206,500
Great Smoky Mountains National Park 5 Oz Silver Bullion Coins 0 500 4,000 1,000 28,000
Shenandoah National Park 5 Oz Silver Bullion Coins 0 0 19,100 500 19,600
Arches National Park 5 Oz Silver Bullion Coins 1,000 13,500 N/A 14,500 14,500


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