Gold slides 0.5%; Nymex crude falls 2.4% on bigger-than-expected supply increase

San Francisco (Oct 22)   Gold—often viewed as an inflation hedge—moved down after a report that showed inflation remains in check.

Gold for December delivery shed 0.5 percent to finish at $1,245.50 an ounce.

A Labor Department report today indicated that U.S. consumer prices rose slightly last month owing to higher costs for food and housing, but inflationary pressures continue to be held in check by falling energy expenses.

The consumer-price index climbed a seasonally-adjusted 0.1 percent in September, meeting the consensus forecast from economists.

The dollar’s gain today also weighed on gold, as a key dollar index advanced 0.4 percent. A stronger greenback often hurts dollar-denominated commodity prices as it makes them more expensive to holders of other currencies.

In other metals trading, December silver lost 1.8 percent to $17.23 an ounce.

In energy trading, U.S. oil prices fell today to a two-year low, reversing course after a weekly supply report showed a higher-than-expected increase in supplies of the commodity.

Crude futures for December delivery declined 2.4 percent to finish at $80.52 a barrel on the New York Mercantile Exchange. That was oil’s lowest settlement since June 28, 2012.

December Brent futures fell 1.8 percent to $84.71 a barrel on London’s ICE exchange. That settlement is Brent’s third lowest of the year.

Both benchmarks are about 25 percent lower from peak prices hit in June.

The U.S. Energy Information Administration said U.S. crude-oil supplies rose by 7.1 million barrels in the week ended Oct. 17.

Crude futures had traded at $82.55 a little before the report was released.

Source:  ProactiveInvestors