All four metals are higher for the week, as the CPI for July was announced this morning at 8.5%. Lower than June’s 9.1% number and my estimate of 8.6%. For the week gold was up 2% to $1,804.00, silver was 3% higher to $20.80, platinum was up 4% to $950.00, and palladium jumped 8% to $2,292.00.
Looking back one year, we have gold up 4%, silver down 11%, platinum 5% lower, and palladium down 14%. YTD, we have gold and palladium showing a positive return and leading the way for most asset categories.
When we dig into the 8.5% CPI number for July, we see that significant challenges remain for most consumers. Food inflation is at the highest levels Y/Y since 1979, and real weekly wages (wage increases compared to the rate of inflation) are at minus (-) 3.6% Y/Y. So while 8.5% is lower than 9.1%, challenges remain.
The impact on retirees will be a 2023 COLA increase of 7.4-8.6%, beginning next year. I believe oft-touted estimates of 10.25% are unrealistic. As a reminder, Gold and Silver have outperformed the average COLA when it comes to beating inflation.