Leveraged Assets Beginning to Buckle under High Rates

Welcome to this week’s Market Wrap Podcast, I’m Mike Gleason.

Precious metals markets are trading quietly this week even as inflation data comes in hotter than expected.

Gold prices are up a slight 0.3% since last Friday's close to trade at $1,935 an ounce. The silver market shows a small weekly gain of 0.7% to bring spot prices to $23.32 per ounce. The PGMs have performed better. Platinum is up 3.5% this week to trade at $940. And finally, palladium is putting in a weekly gain of 3.2% to come in at $1,276 an ounce as of this Friday morning recording.

The latest Consumer Price Index and Producer Price Index reports show inflation ticked back up in August. After several months of moderation in the data sets, rising energy prices this summer helped drive the CPI and PPI gauges higher.

"News Anchor: Inflation rose again in August, fueled by higher gasoline prices.

News Reporter: Inflation ticked up for a second straight month in August, that's according to the Bureau of Labor Statistics. Consumer prices climbed 3.7% last month from the year prior. It also rose 0.6% on a monthly basis. That's the biggest month to month increase this year.

Rick Santelli (CNBC): The August read for producer prices, the wholesale version, of course, headline number expected to be up four tenths is up significantly more, up seven tenths of one percent. That's the hottest read going back to June of '22."

Soaring housing costs aren't fully reflected in the CPI. It doesn't factor in actual home price increases at all. Instead, the CPI tracks owners’ equivalent rent -- the monthly payment that theoretically would have to be paid to rent a house that is owner occupied.