Gold Price Steady, CPI Higher | July 12, 2018
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Gold Price Steady, CPI Higher

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Gold Price Steady, CPI Higher

Even as stock markets rebounded in earnest Thursday, the precious metals also regained some ground.

Gold prices were up $5 (+0.4%) to $1,246/oz after losing more than 1% yesterday.

Spot silver also rebounded 0.7% to $15.90/oz after tumbling by 25¢ (-1.55%) Wednesday.

Palladium was mostly flat at $935/oz but platinum surged 1.7% (+$14) back to $840/oz.

Inflation and Jobless Claims

President Trump's visit to the U.K. amid its Brexit quagmire has unsurprisingly garnered most of the headlines Thursday. However, there was plenty of economic data in the U.S. for investors to focus on.


Weekly jobless claims dropped by 18,000 to 214,000, the lowest total in two months.

While the data continued to suggest a robust job market, wages have remained relatively stagnant. Economists typically expect a tighter labor pool to put upward pressure on wages.

According to a separate report from the Department of Labor, inflation has all but erased any wage gains over the past year in real terms. The consumer price index (CPI) came in at 2.8% year-on-year in June, the highest annual rate in six years.

The monthly increase in inflation was still less than expected, causing a mixed reaction to the report.

Overall, the latest CPI reading paints the picture of "goldilocks" inflation: Prices haven't risen alarmingly fast, but they are climbing at a consistent pace. In any event, the case for the Fed raising rates two more times this year is likely bolstered by the data.

Equities have been shaky of late due to multiple sources of uncertainty, but gold has experienced very low volatility during the slow summer months.

Earnings Drive Stock Markets

One key driver of inflation has been the surging price of oil. Following a considerable pullback, crude prices climbed again Thursday. Brent crude was up 1.0% (+75¢) to $74.15/bbl and WTI added 0.7% to $70.85/bbl.

Commodities were higher almost across the board despite the dollar index holding steady at 94.75.

The USD's major peer currencies pared earlier losses. The euro was down to $1.168, the yen traded at ¥112.45 per dollar, and the pound sterling hovered above $1.32.

Wall St pushed higher after stumbling lower yesterday. The Dow Jones and Nasdaq each advanced better than 0.6% during the first hour of the session.

Market action will likely be sensitive to corporate earnings today. Big financials like Wells Fargo, JPMorgan, and Citigroup all report quarterly earnings today.

Equities rallied again in Asia overnight. Japan's Nikkei added almost 1.2% and the Shanghai Composite jumped 2.15%.

Stocks in France and the U.K. were up about 0.75%.

Most global bonds were in the green Thursday, but the 10-year Treasury yield ticked up one basis point to 2.86%.



The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.

About the Author

Everett Millman

Everett Millman

Analyst, Commodities and Finance
Managing Editor

Everett has been the head content writer and market analyst at Gainesville Coins since 2013. He has a background in History and is deeply interested in how gold and silver have historically fit into the financial system.

In addition to blogging, Everett's work has been featured in CoinWeek, Advisor Perspectives, Wealth Management, Activist Post, and has been referenced by the Washington Post.

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