Thursday, June 14, 2007
Inflation Picture Murky
MarketWatch reports on the markets. "Gold futures closed more than $3 higher Thursday as a larger-than-expected rise in U.S. wholesale prices renewed concerns about inflation, boosting gold's appeal as an investment hedge."
"Wholesale food prices fell 0.2%, the first decline in seven months. Energy prices jumped 4.1%, the biggest increase in six months."
"The 'PPI report shows [that] while the headline number was 'hot,' the core number was only [up] 0.2% -- so gold had a mild but positive reaction,' said John Person, president of NationalFutures.com. 'But most traders and investors know that inflation is driven by accelerating costs such as food and energy, and this is what is supporting gold now,' he said."
"Gold for August delivery closed up $3.20 at $655.90 an ounce on the New York Mercantile Exchange after reaching a high of $658. The contract had fallen a total of $6.30 since Monday with dollar strength a key concern."
"On Thursday, the greenback rallied to a new four-and-a-half year peak against the yen and rose against the euro after news of the bigger-than-expected climb in U.S. inflation at the wholesale level. That stoked speculation the Federal Reserve will have to keep interest rates high."
"Other metals prices closed higher. July silver gained 10.5 cents to finish at $13.165 an ounce, September palladium rose 85 cents to close at $371.50 an ounce and July platinum climbed by $3.50 to end at $1,287 an ounce."
"The U.S. inflation figures 'lessened likely interest-rate hikes, which is metal-positive news,' said Martin Hayes, an analyst at BaseMetals.com."
"Wholesale food prices fell 0.2%, the first decline in seven months. Energy prices jumped 4.1%, the biggest increase in six months."
"The 'PPI report shows [that] while the headline number was 'hot,' the core number was only [up] 0.2% -- so gold had a mild but positive reaction,' said John Person, president of NationalFutures.com. 'But most traders and investors know that inflation is driven by accelerating costs such as food and energy, and this is what is supporting gold now,' he said."
"Gold for August delivery closed up $3.20 at $655.90 an ounce on the New York Mercantile Exchange after reaching a high of $658. The contract had fallen a total of $6.30 since Monday with dollar strength a key concern."
"On Thursday, the greenback rallied to a new four-and-a-half year peak against the yen and rose against the euro after news of the bigger-than-expected climb in U.S. inflation at the wholesale level. That stoked speculation the Federal Reserve will have to keep interest rates high."
"Other metals prices closed higher. July silver gained 10.5 cents to finish at $13.165 an ounce, September palladium rose 85 cents to close at $371.50 an ounce and July platinum climbed by $3.50 to end at $1,287 an ounce."
"The U.S. inflation figures 'lessened likely interest-rate hikes, which is metal-positive news,' said Martin Hayes, an analyst at BaseMetals.com."
# posted by Ben Jones @ 2:00 PM 
