Gold & Silver Hammered After January CPI Reported Higher

GOLD

Today, the Bureau of Labor Statistics said that its Consumer Price Index rose 0.3% in January, following December’s 0.2% increase. The data was hotter than expected with consensus forecasts calling for a 0.2% increase.

Headline inflation in the last 12 months rose more than expected, increasing 3.1%. According to consensus estimates, economists were looking for an annual increase of 2.9%.

The U.S. Dollar jumped higher and precious metals quickly moved lower. Although 3.1% inflation rate is low, traders believe it’s not low enough for the Federal Reserve to start lowering interest rates. Expectations for lowering interest rates is now moving to the summer of 2024.

After the stronger than expected January CPI was reported this morning, Gold quickly sold off, reaching a low of $1,988 per ounce. As Gold broke below the key $2,000 per ounce support level it caused heavy selling and short-selling. Gold needs to rally back above $2,000 quickly to maintain a bullish trend. I believe we will see Asian markets become very aggressive buyers tonight.

At 11am PT today, Gold is trading at $1,993 per ounce, down $28 on very active trading.

SILVER

Silver fell with Gold this morning, reaching a low of $21.94 before quickly rallying back above the $22 level. Silver appears to be holding above $22 per ounce on very active bargain buying.

At 11am PT today, Silver is down $0.66 per ounce, trading at $22.06 on record volume.