Learn How Lack Of Inflation Hurts Precious Metals Prices Directly At Precious-Metal.org

March 4, 2010 – Precious metal prices dropped during early trading today as economic data from Washington, DC suggested a lack of inflation in the US economy. Gold and silver were down in mid-afternoon trading, with gold dropping $7.40 to $1,133.20 and silver losing 6 cents to stand at $17.13. Platinum was trading even at $1,577.00 at 2:00PM EST and palladium was the only precious metal that was up at $457.50. Conversely, the US Dollar Index was up 0.654 to 80.64.

The dollar made gains on the revised numbers for productivity, which increased in the 4th quarter of 2009. Nonfarm productivity stood at a 6.9 percent annual rate, as the index made its biggest one-year gain since 2002. In addition, the unit labor costs fell a revised 5.9% in the fourth quarter and a revised 7.6% in the third quarter. This decline represented the most drastic drop since 1949, the government said.

Unemployment rates also improved, with the number of first-time claims dropping last week by 25,000 to 469,000. "With ample margins of excess capacity in the product and labor markets, inflation is not an immediate threat or worry," wrote Joe Liro, economist for Stone & McCarthy Research.

Precious metals prices typically drop in the absence of inflation. “Precious metals in a portfolio can provide sufficient diversification as well as protection against inflation,” states Zacks Investment Research. The lack of inflationary pressure in the US, as seen by the current economic data, is putting pressure on metal prices today. Register below for one of our precious metal tutorials or call today to see how Precious-Metal.org can help you. 

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Danny Burns

Senior Staff Writer - Precious-Metal.org