Monday Precious Metals Market News (12 August 2024) | Precious Metals Soar Ahead of Key Inflation Report Due Tuesday

 

Monday Precious Metals Market Update (12 August 2024) | Gold, Silver Gain Ahead of New Inflationary Data Report

Precious metals are up Monday morning as traders look forward to July’s Producer Price Index (PPI). The report, scheduled for release on Tuesday (12 August), is one of several core metrics employed by the Federal Reserve to monitor inflation rates in the United States. Favorable data from this report would boost the odds of an early rate cut from the Federal Open Markets Committee, which emphasized last month that it needs more evidence that inflation is sustainably moving toward 2% before rate cuts are likely. 

Economists project that the PPI will likely decrease for the month of July, reversing course after an unexpected .4% hike in June. Bullish projections on this key inflation indicator could be one reason behind today’s positive movement in the gold and silver markets. If these PPI forecasts are actualized, the data could give the Fed the evidence it needs to justify a rate cut at the September meeting. Historically, interest rates have been negatively correlated with precious metal prices. Speculation surrounding if – and when – interest rate reductions are coming has played a vital role in price-action across metal markets this year. 

Gold is up over $40 and climbed within $15 of its all-time high to start the week. Silver’s price jumped over half a dollar and crossed the $28 level for the first time in over one week. Both metals display bullish trend-lines to open this week of trading, but tomorrow’s Producer Price Index should give traders more insight into where the markets may be heading. 

Gold and Silver Battle For Key Supports – Here’s What to Expect in Precious Metal Markets This Week 

The gold and silver markets continue a trend of volatility heading into the end of Q3 2024. Gold soared through multiple all-time highs earlier this year but began August with a series of dips. Silver remains up on the year, but major drops last month saw the precious metal struggle to maintain a solid support above $28/ozt. Both metals dropped last Monday on the heels of a global market rout. Silver claimed a modest recovery by the end of thee week, but gold took much larger gains and almost entirely recovered on Friday. 

Gold bulls continue to target a strong support above $2,400. Today’s price movement puts a new all-time high well within range. Will gold hit a new all-time high this month? Gold could feasibly challenge its recent all-time high of $2,482.97, a record set last month on 17 July. Economic data from the Bureau of Labor Statistics, including Tuesday’s Producer Price Index (PPI) will play a key role in determining whether or not interest rate cuts establish a strong case for investor bullishness on safe haven assets like gold and silver. 

For silver, establishing support above the $28/oz level remains a challenging obstacle. In May and July, the precious metal crested above $31. Concerns about the strength of the U.S. labor market dealt a heavy blow to silver prices, which only recently recovered the $28 line. Higher silver prices may be in the market’s near future, given silver’s strong fundamentals and the record supply deficit facing the industry in 2024. 

Experts forecast good news from tomorrow’s Producer Price Index, but the real data will give traders more insight into when interest rate cuts are coming – and where precious metal prices are heading.