Gold And Silver Test Support And Quickly Rally Higher

GOLD

This morning the U.S. Commerce Department released the personal consumption expenditures price index numbers for June. This is the favorite inflation barometer for the Federal Reserve, and it increased 0.3% for the month when excluding food and energy. The monthly number is even with the street’s forecast, while the so-called core PCE’s increase of 4.6% from a year ago, this is a 0.1% point less than expected.

The above news quickly caused the U.S. Dollar Index to drop and precious metals to rally. Gold, tested the $1,900 support level during early European trading and quickly rallied to over $1,923 on the Commerce Department news.

At 11am PT today, Gold is trading at $1,918, up $8 per ounce on average volume.

SILVER

Silver followed Gold higher, reaching a high of $22.95 before seeing some light selling today. With the Inflation data moving in the right direction, as the Fed's preferred gauge falling to a 2-year low in May, this should be bullish for Silver. At 11am PT today, Silver is up $0.15 per ounce, trading at $22.75 on normal volume.