Precious Metals Struggle as Inflation Numbers Remain Weak

Wall St. Cheat Sheet

On Tuesday, gold (NYSEARCA:GLD) futures for August delivery, the most active contract, fell $16.20 to close at $1,366.90 per ounce, while silver (NYSEARCA:SLV) futures for July decreased 8 cents to finish at $21.68.

Both precious metals declined as government inflation numbers continue to remain weak. The latest consumer price index report, released by the U.S. Bureau of Labor Statistics, showed an increase in the average price of goods and services of 0.1 percent in May, below expectations for an increase of 0.2 percent.

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Much of the negative pressure recently has been in the food and energy components of the headline index. These components are generally volatile given the nature of the underlying markets, but even core measures, which strip out food and energy, have remained soft. Core CPI increased just 0.2 percent in May and 1.7 percent on the year.

By the end of the day, the SPDR Gold Trust (NYSEARCA:GLD) dropped 1.23 percent, while the iShares Silver Trust (NYSEARCA:SLV) fell 1.04 percent. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM) both declined by more than 2 percent. Shares of Endeavour Silver (NYSE:EXK) fell 1.8 percent.

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Disclosure: Long EXK, AG, HL, PHYS

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