New data indicates inflation numbers were still high in April. The consumer price index (CPI) hit 8.3% last month, which was more than the estimated 8.1%. While it was a slight decrease from March’s 8.5%, inflation is still near 40-year highs. In other news, many financial experts say that the demand for gold is and will remain strong. “The big headwind had been the strong U.S. dollar. When you consider that, I think gold has actually been performing reasonably well,” Steve Land, VP and portfolio manager of Franklin Templeton’s Franklin Gold and Precious Metals Fund, told Kitco News. “Gold’s role in times of crisis and uncertainty is to maintain and preserve value, which it is doing.”


AP/Christopher Rugaber
US inflation hit 8.3% last month but slows from 40-year high

Inflation slowed in April after seven months of relentless gains, a tentative sign that price increases may be peaking while still imposing a financial strain on American households.

Consumer prices jumped 8.3% last month from 12 months earlier, the Labor Department said Wednesday. That was below the 8.5% year-over-year surge in March, which was the highest rate since 1981. On a month-to-month basis, prices rose 0.3% from March to April, a still-elevated rate but the smallest increase in eight months.

Still, Wednesday’s report contained some cautionary signs that inflation may be becoming more entrenched. Excluding the volatile food and energy categories, so-called core prices jumped 0.6% from March to April — twice the 0.3% rise from February to March. Those increases were fueled by spiking prices for airline tickets, hotel rooms, and new cars. Rental costs also rose sharply.

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Wealth Profesional/Noelle Boughton
Why demand for gold is rising, and expected to continue amid volatility

Demand for gold rose significantly in the first quarter this year, rising on the back of strong investment flows in gold ETFs and increased investment in gold bar and coin demand in the U.S. and Europe, and it is expected to keep rising this year, according to the World Gold Council.

“Higher interest rates are likely going to create a happening for gold, especially in an environment where there’s a little uncertainty about what the Fed, and the central banks, are going to do,” Juan Carlos Artigas, the council’s Global Head of Research told Wealth Professional, noting there is concern about how they’ll curb inflation while avoiding a recession. “Higher nominal rates are generally a headwind for gold because they increase the opportunity cost of holding gold.”

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Kitco News/Neils Christensen
Gold is a ‘good hiding place’ for investors as S&P 500 falls nearly 16% this year – Franklin Templeton

The gold market has fallen through initial support at $1,850 an ounce; however, one portfolio manager said that the precious metal remains an attractive safe-haven asset as market volatility grows.

In a telephone interview with Kitco News, Steve Land, vice president, and portfolio manager of Franklin Templeton’s Franklin Gold and Precious Metals Fund, said that although gold has struggled to attract any consistent bullish momentum, it continues to outperform equity markets.

Since the start of the year, the S&P 500 has fallen 16% as the index drops to 4,000 points Tuesday. Meanwhile, even with Tuesday’s selling pressure, gold prices are roughly neutral for the year. June gold futures last traded at $1,836.70 an ounce, down more than 1% on the day.

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