Producer prices came in hot again in August, charting the biggest annual gain in nearly 11 years. This indicates “transitory” inflation isn’t going away any time soon.
The PPI for August rose 0.7% month-on-month. Economists were forecasting a 0.6% rise. This follows on the heels of two straight months with producer prices increasing 1.0%.
While the CPI numbers came in around expectations in July, the producer price data came in hotter than expected for the seventh straight month, putting a damper on the notion that “transitory” inflation might be cooling.
Gold and silver got pummeled on Tuesday. The price of gold dropped more than 5%, falling far below the $2,000 level. It was the worst single-day rout in seven years. Gold continued to fall in Asian trading Wednesday morning and briefly dropped below $1,900 before clawing back later in the session. Silver also had a precipitous fall, diving some 13%.
Peter Schiff talked about the sell-off during his podcast. He said we shouldn’t lose sight of the fundamentals and they’re still bullish for gold. The Fed isn’t about to stop printing money and inflation is going to win.
