But inflation is not the only factor affecting gold prices, geopolitical instability in the world also has a significant impact on gold, so we cannot rely on gold price fluctuations to predict CPI and Fed moves.
According to the news I read, experts and banks are very optimistic that the Fed will continue to lower interest rates this December even if the CPI index is not as expected. CPI is considered the Fed's preferred indicator but it is not the only factor they consider, so even if CPI is higher than expected, it's hard to say they'll stop cutting rates.
Although inflation has not fallen below 2%, it has not gotten worse and if I remember correctly, inflation last month was 2.6%, which is not a worrying level of inflation. So no need to worry too much.
Topic: Gold vs C. P. I🔥 (Read 64 times)
The recent rise in gold ahead of the CPI release is speculative, not a clear signal from the economy. The next inflation data will likely show moderate increases, and despite this, yearly inflation will still be above the Fed's 2% target. Unemployment has moved up to 4.2%, but that doesn't quite confirm the presence of stagflation given the relative resilience seen in labor markets. Although there are concerns over the Fed's inflation strategy, things are not that bad. The effects of monetary policy usually work with a lag. Modest stabilization of inflation could, therefore, let the Fed meet its goals without any serious disruptions.
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So now there's this question whether or not the Fed is still winning, whether inflation will return to 2%, whether jobs can maintain steady or continue to cool. If we get a higher CPI and/or Core, gold is likely to break over the falling trend line and back towards $2,720s
I don't think the price of gold can only be linked to interest rates in America at the moment. So now there's this question whether or not the Fed is still winning, whether inflation will return to 2%, whether jobs can maintain steady or continue to cool. If we get a higher CPI and/or Core, gold is likely to break over the falling trend line and back towards $2,720s
There are a lot of trouble spots at the moment, in addition to Ukraine and Israel, Syria has now been added to the list. In such unstable global political times, gold is still a very safe haven and will therefore certainly be favored by investors.
The weakness of the US economy and its immense mountain of debt are of course doing the rest.
I personally believe that prices will still be significantly higher in the medium term than we are currently seeing.
Gold is Up Before CPI
With CPI tomorrow, gold opened up green and is heading higher towards resistance near $2,700. Investors could be anticipating a higher number tomorrow which would be a bad sign for two reasons. Other than the Fed losing the inflationary battle, a higher CPI would look more like stagflation with our current jobs numbers. The US now has 4.2% unemployment, 0.1% higher than last month (which is significant). We have seen 4% or higher since May of this year. And while CPI was on its way down, the trend was broken in November when we jumped from 2.4 to 2.6% inflation.
So now there's this question whether or not the Fed is still winning, whether inflation will return to 2%, whether jobs can maintain steady or continue to cool. If we get a higher CPI and/or Core, gold is likely to break over the falling trend line and back towards $2,720s
With CPI tomorrow, gold opened up green and is heading higher towards resistance near $2,700. Investors could be anticipating a higher number tomorrow which would be a bad sign for two reasons. Other than the Fed losing the inflationary battle, a higher CPI would look more like stagflation with our current jobs numbers. The US now has 4.2% unemployment, 0.1% higher than last month (which is significant). We have seen 4% or higher since May of this year. And while CPI was on its way down, the trend was broken in November when we jumped from 2.4 to 2.6% inflation.
So now there's this question whether or not the Fed is still winning, whether inflation will return to 2%, whether jobs can maintain steady or continue to cool. If we get a higher CPI and/or Core, gold is likely to break over the falling trend line and back towards $2,720s
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