Mid-Day Gold & Silver Market Report – 3/15/2013

INFLATION HIGHEST IN THREE YEARS; CONSUMER SENTIMENT DROPS

According to the U.S. Department of Labor, February’s increase in gasoline prices was an unexpected primary contributor to the 0.7 percent increase in the consumer price index (CPI), accounting for about three quarters of the increase. The Department of Labor is reporting that excluding the spike in gasoline, the CPI rose only 0.2 percent, a figure well within expectations. The government reported that inflation-adjusted hourly earnings for all employees fell 0.6 percent in February, though the real average hourly earnings increased 0.1 percent for the full 12 months ending in February.

As an added blow to the increased CPI, a separate report from Thomson Reuters/University of Michigan shows that consumer sentiment dropped to 71.8 from 77.6, though it was expected to rise to 78. Across the board spending cuts and government policies were cited as influential in the downgrade. Thirty four percent of respondents, beating the previous record of 31 percent, indicated unfavorable references. In addition, 30 percent of consumers expect economic growth to continue worsening in the next year.

The Gold price is closing in on another positive week as the euro makes gains against the dollar. News about the U.S. CPI is adding fuel to the debate that the Federal Reserve could continue its current course of monetary easing, which has been favorable for Gold because low interest rates encourage investors to put money into non-interest-bearing assets, like Gold.

At 1:10 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,595.60, Up $2.40.
• Silver, $28.86, Down $0.02.
• Platinum, $1,592.10, Down $0.30.
• Palladium, $774.60, Up $4.90.

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