On Tuesday, gold (NYSEARCA:GLD) futures for December — the most active contract — declined $8.40 to close at $1,309.40 per ounce, while silver (NYSEARCA:SLV) futures fell 23 cents to finish at $21.78.
Both precious metals experienced selling pressure as the latest reading on inflation rose less than expected in August. According to the U.S. Labor Department, the consumer price index increased only 0.1 percent on a seasonally adjusted basis last month, the weakest gain in three months. Core inflation, which excludes necessities such as energy and food, also increased only 0.1 percent.
Over the past year, the index slowed to 1.5 percent, down from an annual rate of 2 percent in July. Economists expected consumer prices to rise 0.2 percent in August and 1.6 percent from a year earlier.
With the Federal Open Market Committee sitting down for the first day of a two-day policy meeting Tuesday, the atmosphere is thick with taper talk. Most economists are expecting Federal Reserve policymakers to announce some sort of reduction in the asset purchases program despite low inflation suggesting that there is room to continue.
In afternoon trading, shares of the SPDR Gold Trust (NYSEARCA:GLD) and iShares Silver Trust (NYSEARCA:SLV) both managed to edge slightly higher. Gold miners (NYSEARCA:GDX) Yamana Gold (NYSE:AUY) and Newmont Mining (NYSE:NEM) increased 2.9 percent and 0.9 percent, respectively. Shares of First Majestic Silver (NYSE:AG) gained 1 percent.
Follow Eric on Twitter @Mr_Eric_WSCS
If you would like to receive professional analysis on miners and other precious metal investments, we invite you to try our premium service free for 14 days.
Disclosure: Long EXK, AG, HL, PHYSRead the original article from Wall St. Cheat Sheet
Most Popular Slideshows
- Victoria's Secret Fashion Show 2013: Models' Ramp Walk Aired on Tuesday [PHOTOS]
- Victoria's Secret Fashion Show 2013: Bold, Sexy and Sensuous Lingerie Fashion [PHOTOS]
- Victoria's Secret Fashion Show 2013: Drooling Guys, Conscious Girls, Naughty Jokes on Twitter [SEE PHOTOS]
- Victoria's Secret Fashion Show 2013: Best Pictures From The Sexiest Show Ever [ SEE PHOTOS/VIDEOS]