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USAGOLD/Peter Grant/08-10-17
Gold extended to the upside, bringing the high for the year at 1296.06 from June within striking distance. Silver is trading with a 17 handle for the first time in 8-weeks.
The precious metals continue to be buoyed by heightened geopolitical tensions between the U.S. and North Korea. Serious talk about a potential nuclear exchange is understandably unnerving, which is inciting investors to move into safe-havens. And the safest of all safe-havens is gold.
July PPI came in at -0.1%, below expectations of +0.1%; slowing to a 1.9% annualized pace. Core PPI was -0.1%, below expectations of +0.2%, bringing the annualized rate down to 1.8%.
This additional evidence that price pressures are on the wane will further erode rate hike expectations for the remainder of the year. It may also give the Fed pause when it comes to beginning balance sheet normalization.
CPI is out tomorrow. Headline and core CPI are both expected to come in at +0.2%. Misses will be just another nail in the tightening cycle’s coffin.
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