Market Overview Analysis by Michele Schneider covering: XAU/USD, XAG/USD, US Dollar Index Futures, Gold Futures. Read Michele Schneider's latest article on Investing.com
), have helped, but the essential question is why has gold been going up all along well ahead of yesterday's CPI?
The notion of the FED higher for longer may not be the case as the cost of servicing the Federal debt alone will approach 6% of GDP by year-end. A drop of 150 basis points will reduce the interest payment by 33%. These debt imbalances put the Fed between a rock and a hard place-risk higher inflation or create financial repression by the banks?
Gold is not rallying because of runaway inflation-while CPI is rising it is not anywhere near hyperinflation numbers-so imagine if that happens because the FED reduces rates-and for any reason, the dollar falls?Silver outperforming gold is inflationary-we are not seeing that yet.This is not 1979 inflation right now. But imagine if that happens with a FED behind the curve.
But we also believe that when the time comes it has run its course-it will be obvious, and the PMs will go back into hibernation indefinitely.76.50 broke so risk off for nowRisk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.
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