Gold prices eased from challenging a new all-time high on Tuesday, dragged by profit-taking and a pair of reports that amounted to a mixed sentiment on how much of a toll inflation was still registering on markets.
Gold traded at $2,468 per ounce, down $7.47, early Tuesday, retreating from its Monday close less than $10 away from its mid-July high of $2,482 per ounce. Silver also was dinged, trading $0.37 down at $27.65 per ounce.
The Producer Price Index, a key measure of wholesale inflation, increased 0.1% in July, lower than Wall Street estimates of 0.2%, according to data from the U.S. Bureau of Labor Statistics. The PPI, which measures prices that producers get for goods and services, rose 0.2% in June and was unchanged in May.
Core PPI, which excludes food, energy, and trade services, increased 0.3% in July after increasing 0.1% in June and rose 3.3% year over year, according to the report.
Those better-than-anticipated figures on wholesale prices conflicted with a separate report released Tuesday that tracks the health and challenges of the nation’s small businesses.
The NFIB Small Business Optimism Index rose 2.2 points in July to 93.7 – the highest reading since February 2022 – but the 31st consecutive month below the 50-year average of 98. Small business owners again cited inflation as the top concern, with 25% reporting it as their single most important issue in operating their business – up 4% from June, the data found.
“Despite this increase in optimism, the road ahead remains tough for the nation’s small business owners,” NFIB chief economist Bill Dunkelberg said in a statement accompanying the index. “Cost pressures, especially labor costs, continue to plague small business operations, impacting their bottom line. Owners are heading towards unpredictable months ahead, not knowing how future economic conditions or government policies will impact them.”
A slowdown of wholesale inflation alone appeared to crack the door a little wider for the Fed to lower interest rates in September, yet plenty of questions remain. Bullion investors will now look ahead to Wednesday’s key Consumer Price Index for additional clues.
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