Gold continues to trade comfortably above $2,000 an ounce even with today’s slight dip in the price on a day where the key focus of attention will be the latest US inflation data.
If the CPI data released this afternoon confirms that inflation is continuing its downward trend and therefore the series of interest rate hikes that the Federal Reserve has implemented in the last year are having the desired effect and bringing inflation back towards the US central bank’s 2% target.
This could also see both equities and gold rise, two asset classes that often move in opposite directions, as positive news on the inflation front would be supportive for companies tackling ever rising prices as well as for gold as it would increase the likelihood of the Fed’s most recent hike being its last one.
The short-term outlook for gold therefore remains supportive but further out the price could be set for a fall back below $2,000 and indeed down towards $1,900 an ounce as positive inflation data could be the first step towards confidence returning to equities markets and therefore a reduction in the need for gold’s safe-haven qualities.
Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.
This publication is for informational purposes only and is not intended to be a solicitation, offering or recommendation of any security, commodity, derivative, investment management service or advisory service and is not commodity trading advice. This publication does not intend to provide investment, tax or legal advice on either a general or specific basis.