Precious metals rallied Wednesday after a report showed U.S. inflation declined in August for the first time since January, easing expectations that the Fed will raise interest rates for the first time in nearly a decade.
Gold for December delivery advanced $16.40, or 1.5%, to settle at $1,119 an ounce on the Comex division of the New York Mercantile Exchange. Gold prices traded from a low of $1,103 to a high of $1,123.70. They slipped 0.5% on Tuesday.
Early Wednesday, the U.S. Labor Department said consumer prices fell 0.1% in August after advancing 0.1% in July. Core inflation on an annual basis registered at 1.8% for a third straight month. The Federal Open Market Committee has a 2% inflation target.
"The CPI data gives us another reason to put off the rate hike tomorrow," James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview according to Bloomberg News. "Gold would still look undervalued if we’re going to keep rates where they are."
The FOMC ends its two-day policy meeting on Thursday when a decision on interest rates becomes public.
"The tame CPI numbers have caused gold shorts, who were hoping in vain for a test under $1,100, to cover ahead of tomorrow’s Fed decision," Reuters quoted Tai Wong, director of base and precious metals trading for BMO Capital Markets, adding that the price index number is "incrementally more likely to keep the Fed on hold."
Snapping a three-session losing streak, silver for December delivery soared 56 cents, or 3.9%, to close at $14.89 an ounce. Silver prices ranged from $14.31 to $14.97.
In other precious metals futures on Wednesday:
October platinum tacked on $17.50, or 1.8%, to $975.70 an ounce, trading between $956.30 and $976.70.
- Palladium for December delivery added $11.50, or 1.9%, to $611.95 an ounce, ranging from $594 to $613.
London Precious Metals Prices
Earlier fixed London gold and silver prices advanced as well, each up 1.1%. In comparing their prices from Tuesday PM to Wednesday PM:
- Gold added $11.65 to $1,117.60 an ounce.
- Silver gained 16 cents to $14.51 an ounce.
LBMA platinum and palladium prices are displayed on the LBMA’s website with a delay of midnight after the setting of the prices each day.
US Mint Bullion Coin Sales in September
United States Mint gold sales advanced by 7,000 ounces. This week’s three-day gains in gold coins total 46,500 ounces, which is already 17,000 ounces more than last week’s five-day haul.
Sales of American Silver Eagles are maxed for the week. The U.S. Mint has restricted sales of the coins since temporarily running out of them in early July. The agency allocated 809,500 for this week and the last batch went out Tuesday. Silver Eagle sales this year at 34,304,500 coins are on a record pace, up 18.6% through the same time last year. In 2014 when sales ended at a record 44,006,000, the coins by Sept. 16, 2014 reached sales of 28,921,000.
Below is a listing of United States Mint bullion products with the number of coins sold during varying periods. Products with an asterisk (*) are no longer available.
|US Mint Bullion Sales (# of coins)|
|Wednesday Sales||Last Week||This Week||August Sales||Sept Sales||YTD Sales|
|$50 American Eagle 1 Oz Gold Coins||5,500||21,500||33,500||78,500||74,500||496,000|
|$25 American Eagle 1/2 Oz Gold Coins||0||1,000||3,000||8,000||6,000||60,000|
|$10 American Eagle 1/4 Oz Gold Coins||2,000||2,000||6,000||24,000||10,000||132,000|
|$5 American Eagle 1/10 Oz Gold Coins||5,000||25,000||40,000||130,000||110,000||765,000|
|$50 American Buffalo 1 Oz Gold Coins||500||4,500||6,000||20,000||16,000||164,500|
|$1 American Eagle 1 Oz Silver Coins||–||1,000,000||809,500||4,935,000||2,054,500||34,304,500|
|2015 Homestead 5 Oz Silver Coins*||–||35,000|
|2015 Kisatchie 5 Oz Silver Coins*||–||42,000|
|2015 Blue Ridge Parkway 5 Oz Silver Coins*||–||45,000|
To see how inflation has changed the buying power of the U.S. dollar over time, use this site’s Inflation Calculator.