Bullion prices ended higher at Comex on Wednesday, 12 June 019. Gold prices scored back-to-back session gains on Wednesday, with global headlines emphasizing trade-war uncertainty, tensions in the Middle East and protests in Hong Kong providing a lift to the haven metal.
Gold for August delivery on Comex rose $5.60, or 0.4%, to settle at $1,336.80 an ounce. Futures prices, which have now climbed for 10 out of 11 sessions, are up roughly 2% month to date. July silver, which serves as both a haven asset and has industrial purpose, added 1.3 cents, or almost 0.1%, to $14.753 an ounce.
With trade still in focus, most global stock markets declined, boosting the appeal of haven gold. The precious metal held onto gains after a report showed that the U.S. consumer price index rose a scant 0.1% in April. It was the smallest increase since January.
Gold benefited from a sharp slide in U.S. Treasury yields last week as investors increasingly bet the Federal Reserve will move later this year to cut interest rates. Lower yields can be a positive for gold, reducing the opportunity cost of holding the metal.
Reviewing Wednesday's economic data, which included the Consumer Price Index for May, the weekly MBA Mortgage Applications Index, and the Treasury Budget for May. Total CPI increased 0.1%, as expected, and so did core CPI, which excludes food and energy prices (consensus +0.2%). The monthly changes left the yr/yr readings at 1.8% and 2.0%, respectively, versus 2.0% and 2.1% for the 12 months ending in April. The key takeaway from the report is that consumer inflation pressures remain muted, which in turn is going to reinforce the market's inflated expectations for the Fed to cut the target range for the fed funds rate sooner rather than later.
The weekly MBA Mortgage Applications Index soared 26.8% amid a drop in mortgage rates.
Separately, the Treasury Budget for may showed a deficit of $207.8 billion versus a deficit of $146.8 billion for the same period one year ago. The Treasury Budget is not seasonally adjusted, so the May deficit cannot be compared to the $160.3 billion surplus for April. The fiscal year-to-date deficit is $738.6 billion versus a deficit of $532.2 billion for the same period ago. The budget deficit over the last 12 months is $985.4 billion, versus $924.4 billion for the 12 months ending in April.