How Gold and Metals Reacted to US Economic Data
Precious metal prices
Gold prices rose for the fifth straight trading day on Tuesday, May 16. Gold futures for June expiration were 0.52% higher on Tuesday and ended the day at $1,236.4 per ounce, after touching a high of $1,239.1 during the day. Silver and platinum also followed the same route as gold and jumped 0.87% and 0.89%, respectively. Silver futures for July expiration closed at $16.8 an ounce.
Platinum ended the day at $937 an ounce. Palladium was 0.63% lower and closed at $792 per ounce. Palladium is the only precious metal that has seen a loss over the past five trading days. The other precious metals have increased during the same timeframe. Palladium, on the other hand, had a 30-day trailing gain, whereas the other three have tumbled during this period.
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The economic data that came out during the last week showed weakness in the US economy. The CPI (Consumer Price Index) and the Core CPI numbers turned out to be worse than analyst expectations. The CPI and Core CPI stood at 0.2% and 0.1%, respectively. Retail sales, which measure the change in total sales at the retail level, were also at 0.4%, lower than the estimated 0.6%.
The negative numbers didn’t encourage haven bids for precious metals this time, as weak economic figures could make the Fed hesitate about increasing interest rates at its upcoming meeting. After the slump last month, precious metals are likely in a recovery mode.
The revival of precious metals also gave some buoyancy to mining funds like the Sprott Gold Miners (SGDM) and the Global X Silver Miners (SIL). These two funds have jumped 7.5% and 9.4%, respectively, during the past five trading days.