Money and Metals

The Associated Press reports on currencies. "The dollar fell against the euro and British pound Tuesday after a tame U.S. inflation report damped expectations for higher interest rates in the world's largest economy. The euro rose as high as $1.3608 before settling back to $1.3592 in late New York trading, up from $1.3541 late Monday. That put the 13-nation currency back within one cent of its all-time high of $1.3682, reached last month."

"The pound rose to $1.9853 from $1.9732, while the dollar barely fell to 120.26 Japanese yen from 120.29 yen."

"The U.S. Labor Department reported that consumer prices rose by 0.4 percent last month following a 0.6 percent jump in March. The April increase was slightly lower than expected, even though gasoline prices surged."

"Economic data are being watched closely for clues on the Federal Reserve's future interest rate course. Higher interest rates, used to combat inflation, can bolster a currency by making certain types of investments more attractive."

"The European Central Bank has increased rates steadily over recent months and is expected to raise them at least once more, while the U.S. Federal Reserve is expected to continue leaving its rates unchanged."

"In other trading, the dollar bought 1.2153 Swiss francs, down from 1.2189 late Monday, and 1.0982 Canadian dollars, slipping from 1.1072."

From MarketWatch. "Gold futures climbed more than $4 an ounce Tuesday to close at a nearly one-week high, moving inversely with weakness in the U.S. dollar on the heels of fresh U.S. economic data, which showed that consumer inflation eased a bit in April."

"Gold for June delivery closed up $4.40 at $674.50 an ounce on the New York Mercantile Exchange after trading at $675. The contract marked its strongest close since May 9."

"Strength in oil prices, which sparked concerns over the economy, also contributed to gold's climb Tuesday. June crude climbed above $63 a barrel for the first time since May 4."

"Other metals prices were mixed. June palladium fell $2.25 to finish at $358.45 an ounce while July platinum tacked on $10.30 to end at $1,339.60 an ounce.
Prices for the platinum group metals declined Monday after a report released Monday from metals refiner Johnson Matthey said palladium demand fell in 2006 and the market ended the year with a surplus of supplies."

"Meanwhile, July silver followed gold higher, closing 8 cents higher at $13.315 an ounce on Nymex. The '2007 Silver Yearbook,' issued by researchers CPM Group late Monday, painted a 'bullish picture for the silver market as surging investment demand and lower mine supplies easily negated lower industrial demand,' James Moore, an analyst at TheBullionDesk.com, said."

"Jon Nadler, metals analyst at Kitco Bullion Dealers, also cited the CPM Group report, pointing out that global investors, for the first time since 1989, were net buyers of silver during 2006."

"'This development is seen by CPM as being as important to the silver market as our oft-cited gold market news that since 2005 investors own more gold than all central banks put together,' Nadler said."