Gold and Silver Trade Flat as Inflation Remains Weak

Gold

On Tuesday, gold (NYSEARCA:GLD) futures for December — the most active contract — increased $1.20 to close at $1,273.50 per ounce, while silver (NYSEARCA:SLV) futures edged 2 cents lower to finish at $20.33.

Gold and silver continued to trade sideways as inflation fears remain on the back burner. The average cost of a 10-person Thanksgiving feast is cheaper on a year-over-year basis for the first time since 2009. According to the American Farm Bureau Federation’s 28th annual price survey, Thanksgiving dinner will cost $49.04 this year, down from $49.48 in 2012 and $49.20 in 2011.

“This year we can be thankful that Thanksgiving Dinner, a special meal many of us look forward to all year, will not take a bigger bite out of our wallets,” said John Anderson, AFBF’s deputy chief economist. “Most Americans will pay about the same as last year at the grocery store for a turkey and all the trimmings. Slightly higher turkey production for much of the year coupled with an increase in birds in cold storage may be responsible for the moderate price decrease our shoppers reported.”

While some expenses such as healthcare have jumped recently, other inflation gauges have showed little movement this year. The U.S. Bureau of Labor Statistics’s seasonally adjusted Consumer Price Index for All Urban Consumers increased by only 0.2 percent in September. Over the past 12 months, the agency claims consumer prices are up only 1.2 percent. Investors have kept inflation data in their periphery recently because of the Federal Reserve’s aggressive monetary stance. The central bank maintains that inflation and the headline unemployment rate are important thresholds for its zero interest rate policy.

Heading into the close, shares of the SPDR Gold Trust (NYSEARCA:GLD) edged about 0.10 percent higher, while the iShares Silver Trust (NYSEARCA:SLV) declined 0.15 percent. Gold miners (NYSEARCA:GDX) Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) both gained nearly 1 percent. Shares of First Majestic Silver (NYSE:AG) jumped 1.7 percent.

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Disclosure: Long EXK, AG, HL, PHYS