Gold and Silver Quiet After Inflation Report

On Friday, gold futures for April delivery edged $3.70 lower to settle at $1,655.80 per ounce, while silver futures decreased 12 cents to close at $32.60.  Both precious metals finished the week lower, despite the most recent inflation report.

The cost of living in the United States increased in February by the most in 10 months.  The Labor Department reported that the consumer-price index, which grossly under estimates real inflation, increased a seasonally adjusted 0.4 percent in February from the prior month.  Compared to a year ago, consumer prices jumped 2.9 percent.  Energy costs contributed much to the increase in living costs, with gasoline prices surging 6 percent, the biggest jump in more than a year.

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“Consumer prices are accelerating, and inflation expectations are higher still,” said Adrian Ash, head of research at BullionVault. “Together with bargain-hunting by Asian consumers, that’s likely to put a floor under gold soon enough. People buy gold when they fear inflation ahead.”

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) traded flat, while the iShares Silver Trust (NYSEARCA:SLV) gained .40 percent.  Gold miners (NYSEARCA:GDX) such as Newmont Mining (NYSE:NEM) and Yamana Gold (NYSE:AUY) both edged slightly lower, while Goldcorp. Inc. (NYSE:GG) dropped almost 1 percent.  Silver miners (NYSEARCA:SIL) such as Hecla Mining (NYSE:HL) and Silvercorp Metals Inc. (NYSE:SVM) both gained more than 1 percent.

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To contact the reporter on this story: Eric McWhinnie at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com