AGE Daily Gold Update

AGE Daily Gold Update presents a recap on today's action in the precious metals markets. View archives.

4/12/2023: Gold gains again following CPI

Source: Dana Samuelson, American Gold Exchange

Austin — Gold, silver, platinum, and palladium all gained Wednesday. Declining headline inflation bolstered odds that the Fed would pause their rate hike cycle soon, conversely, rising core inflation boosted the likelihood of yet another quarter point rate hike at the conclusion of the Fed’s May meeting. The possibility of the rate hike cycle pausing, however, caused the dollar and US treasury yields to ease, which in turn helped to buoy metals prices.

In addition, gold and silver continued to enjoy haven support in the wake of the recent banking problems. Gold closed above $2,000 for the seventh straight trading session and silver punched higher yet again, moving firmly over $25.00 for the first time since April 2022.

The headline Consumer Price Index rose 5% YoY in March. It also gained a modest 0.10% MoM from February on a seasonally adjusted basis. While headline CPI continues to ease from last year’s highs core CPI, excluding food and energy, edged higher, up to 5.6% YoY.

A key component of the headline CPI is energy. The energy index fell 6.4% YoY. Energy prices spiked sharply in March of 2022 following the onset of the war in Ukraine. The sharp decline in the energy index in this CPI report was measured against March 2022’s sharp spike higher. MoM energy prices fell 3.5%, contributing to the overall decline in headline CPI, but these declines may be short-lived following the OPEC+ decision to cut oil production earlier this month.

The food index rose 8.5% YoY and was flat MoM. Shelter, part of the so-called sticky inflation which comprises about a third of overall CPI, rose 0.6% MoM and is up 8.2% YoY. Analysts do anticipate this component, which lags, to ease later in the year.

Overall, while headline CPI continues to ease from its peak of 9.1% in June of 2022, indicating disinflationary forces are at work, core CPI has remained steady over the last several months and is now higher than headline CPI, indicating the FED still has some work to do to tame inflation.

At the Comex close: June gold gained $5.90 to $2,024.90; May silver added 27 cents, to $25.45; July platinum picked up $22.40 to $1,025.60; and June palladium climbed $12.30 to $1,455.90 an ounce.