Might be short covering ahead of tomorrow’s CPI report
(USAGOLD) –– The gold market suddenly took a turn for the better just after 9am MT (11am ET). The timing coincides roughly with the release of the producer price report which came in under expectations. We are not certain, though, why this relatively benign PPI report would have been enough to inspire a strong uptick in the gold price. The move could be interest-rate/Fed related but we are not convinced. Our gut reaction? Short-covering ahead of the tomorrow’s Consumer Price Index release. A Reuters’ survey of economists estimates the report will show an increase in the .3% range, i.e. a 3.6% annualized rate of inflation. If inflation is indeed entering the picture, it could be enough to inspire fund and institution position covering in both the dollar and gold. As it stands gold is $11 higher at $1208. Silver is up 14¢ at $14.27.
We will update again if anything of interest surfaces. . . . .