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Gold shines as inflation hits 39-year high
Not to give you any spoiler alerts, but so far, the general sentiment among some of the biggest international banks is that gold is expecting to see renewed investor demand as inflation continues to heat up. This is good news for what has been a disappointing year for some.
Not surprisingly, inflation remains the most prominent story heading into 2022. Friday, the U.S. Labor Department said that its Consumer Price Index saw an annual rise of 6.8% last month. This is the highest inflation reading in 39 years, and according to some analysts and economists, there is room for inflation to go higher.
Looking to next year, many economists are expecting inflation pressures to peak in the first half of 2022 and then moderate in the second half of the year; however, consumers can expect to see inflation well above historical norms. Economic forecasts look for inflation to trend between 4% and 6% next year. Read More
Fed's tapering already priced in, can gold price get a boost next week?
With all eyes on the Federal Reserve next week following Friday's hot inflation data, analysts see gold in a good position to surprise investors to the upside.
Friday's U.S. inflation number showed the fastest annual pace in nearly 40 years, up 6.8% in November. The reaction to the data was somewhat mixed as some parts of the report hinted at price pressures potentially peaking.
"Wall Street did not see inflation with a 7-handle, and that allowed risky assets to rise, while the dollar turned negative as traders anticipate the Fed won't be forced to deliver a rate hike well before summer," said OANDA senior market analyst Edward Moya. "November's headline month-over-month CPI reading increased 0.8% was higher than the 0.7% estimate but lower than the prior month's reading of 0.9%. Some of the inflation is moderating, but the year over year reading came in at 6.8%, the hottest since 1982." Read More
"Inflation beast is out" and gold price looks to $3K in response to Fed's policy, says mining strategist
The inflation beast is 'out of its cage,' and the Federal Reserve is now forced to respond. But a tighter monetary policy does not mean lower gold prices, says Christopher Ecclestone, Principal and Mining Strategist at Hallgarten & Co. And here's why.
"There's only one reason why the price of gold will go down, and that is if central banks soft-pedal on inflation, and that's what they have done so far," Ecclestone explained. "But as we see inflation continue to rise, particularly in the U.S. and the U.K., it has gotten out of control. Only higher interest rates will keep inflation down." Read More
It is official; inflation is at the highest level since the 1980s
This morning the U.S. Bureau of Labor Statistics released the inflationary numbers vis-à-vis the CPI index. The report, as expected indicated a new higher level of inflation. Economists polled by various new sources got it right! They forecasted that inflation vis-à-vis the Consumer Price Index (CPI) would increase by 0.7% last month. This took the year-over-year number to 6.8%. This is the most severe inflation seen in the U.S. since the 1980s. Read More
Gold is done falling and the Fed's announcement can't change that - Kitco's gold price survey
(Kitco News) - One thing Wall Street agrees on when it comes to the gold market next week is that the precious metal is unlikely to fall when the Federal Reserve makes its accelerated tapering announcement, according to Kitco's gold price survey.
The 13 participating analysts on the Wall Street side were largely split between higher gold prices and sideways price action next week, with 46% in each camp. The remaining 8% said that prices could decline.
The Main Street side was more decisively optimistic. Out of the 1,039 participating retail investors, 53.6% were bullish on prices next week, 23.9% were bearish, and 22.5% were neutral, Kitco's survey showed. Read More
Gold prices moving higher after U.S. CPI rises 6.8%, biggest jump since 1982
Gold prices are pushing higher, following a stronger-than-expected rise in U.S. consumer prices.
Friday, the U.S. Labor Department said its U.S. Consumer Price Index rose 0.8% in November, after a 0.9% rise in October. The data beat consensus forecasts as economists were forecasting a 0.7% rise.
For the year, the report said that headline inflation rose 6.8%. The report said this is the "largest 12-month increase since the period ending June 1982."
Annual inflation rose in line with expectations. Some economists were bracing for inflation to rise above 7%.
Meanwhile, core CPI, which strips out food and energy costs, increased 0.5% last month, up from a 0.6% increase in October. The data was in line with expectations. For the year, core CPI is up 4.9%.
The gold market moved into positive territory in an initial reaction to the firm headline number. February gold futures last traded at $1,779.50 an ounce, up 0.18% on the day. Read More
Gold and silver trade higher leading into the European open
Both gold (0.17%) and Silver (0.25%) are trading higher leading into the European open at the start of the week. Gold is trading at $1785/oz while silver sits at $22.21/oz. In the rest of the commodities complex, copper is 0.63% in the black while spot WTI is 0.71% higher.
Risk sentiment was pretty good overnight as the Nikkei (0.71%), ASX (0.35%), and Shanghai Composite (0.40%) all closed higher. Futures in Europe are also pointing towards a positive open.
In FX markets, the dollar index trades 0.24% higher and the biggest mover was GBP/USD (-0.38%). In the crypto space, BTC/USD fell -2.84% to trade at $48,638. Read More
Disclaimer: These articles are provided for informational purposes only. They are not offered or intended to be used as legal, tax, investment, financial, or any other advice.
