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Weekly Market Reports

Gold Prices Ascend Amid Higher Factory Inflation

Daily Gold & Silver Market Report – 7/12/2019

  • Gold prices rise as factory inflation rates go up.
  • Industrial growth may be slowing faster than previously thought.
  • Some analysts conclude the industrial sector is already in recession. 

The price of Gold rose Friday morning as news of higher factory inflation began to spread. August Gold futures were up to $1,409.35 per troy ounce as of 9:17 a.m. (ET), which is more than 1 percent above previous highs for this week. Investing.com reports headline inflation at factory gates rose 1.7 percent in June compared to the previous year. These signals fall in line with other data released Thursday, showing core consumer prices unexpectedly moved higher last month.

The article states while these stronger-than-expected inflation numbers may not have widespread ramifications, the data does give rise to concerns over U.S. Federal Reserve Chair Jerome Powell’s statements earlier in the week. Gold prices are often boosted by lower interest rates, which decrease the opportunity cost of keeping bullion on hand, which has no yield. 

Economic Growth May Be Slowing Faster than Fed Expects

As Gold continues to rally and stock markets reach record highs, few people are arguing with the U.S. Federal Reserve on current monetary policy. However, the New York Times observes growing evidence continues that global economic growth may be slowing down more quickly than the Fed had expected. Some investors have predicted that interest rates could be cut as much as one percent over the next year. Forecasts of a quarter- to a half-point cut as early as this month have been made. Lower interest rates typically benefit Precious Metals prices, so Gold and Silver investors have largely seen this as promising news. Some analysts, however, think the Fed is moving too slow. 

Rob Arnott, chairman of the investment advisory service Research Affiliates, is quoted by the New York Times, saying, “The Fed is getting pretty far behind the curve. The bottom line is the Fed can make a difference, but it has to move fast. I don’t know if it can move fast enough.” Several recent surveys executed by regional Fed offices indicated dramatic declines in economic activity. A Morgan Stanley survey puts business confidence at its lowest level in more than a decade. Some analysts have concluded global industry is already in recession. 

At 12:08 p.m. (ET), the APMEX Gold and Silver spot prices were:

  • Gold, $1,412.20 Up $4.70
  • Silver, $15.25 Up $0.05
  • Platinum, $832.60 Up $2.70
  • Palladium, $1,548.80 Down $19.30

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Disclaimer:
APMEX Market Reports provide our readers with a review of spot price activity and some of the factors that may be affecting the market for Precious Metals. While the information is obtained from sources we believe to be reliable, we do not guarantee its accuracy or its completeness and we encourage you to conduct your own investigation prior to making any decision based on the information. The Market Reports are not intended as a comprehensive discussion and there may be other factors affecting the financial marketplace. These Market Reports are provided for informational purposes only and do not constitute a recommendation by APMEX to hold, purchase or sell any Precious Metal product. All orders, purchases and sales, if any, are subject to the terms of the User Agreement and other applicable policies.

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