Gold, silver rally to highest since mid-June after more tame U.S. inflation data

Gold and silver futures gained Wednesday after the latest monthly U.S. consumer price index data showed milder inflation, boosting the possibility that the Federal Reserve may soon stop its interest rate hikes.

The June CPI rose by a smaller than expected 0.2%, while the yearly rate of inflation slowed to 3% from 4% in May, marking the mildest inflation reading since March 2021, while core CPI excluding food and energy rose 4.8%, compared with expectations for a 5% increase.

Gains in gold prices reflected “market sentiment that the Fed, though likely to maintain its plans for two more rate hikes, was nearing the end of its tightening cycle,” according to Jeff Klearman, portfolio manager at GraniteShares.

Front-month Comex gold (XAUUSD:CUR) for July delivery ended +1.3% to $1,956.20/oz, its best finish since June 16, while July Comex silver (XAGUSD:CUR) closed +4.4% to $24.119/oz, its highest settlement value since June 9.

ETFs: (NYSEARCA:GLD), (GDX), (GDXJ), (IAU), (NUGT), (PHYS), (GLDM), (AAAU), (SGOL), (BAR), (OUNZ), (NYSEARCA:SLV), (PSLV), (SIVR), (SIL), (SILJ), (SLVP)

Silver should hit $26/oz by year-end ahead of the Federal Reserve pivoting to a more dovish rate stance in 2024, TD Securities global head of commodity strategy Bart Melek said.

TD sees silver prices beating the average market consensus in Q4 by ~$2/oz, as firmer physical investment tightens supply-demand fundamentals.

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