Commodity Trade Mantra

Posts Tagged ‘Inflation Rate’

Choking Inflation is last thing the Fed wants now - Good for Gold

The Fed will not raise rates for the fun of it. The Fed wants to keep inflation under control, but what the organization really wants is negative real rates. That’s where inflation is higher than nominal rates. It does the Fed no good to raise rates unless inflation is going up even faster. Yet that’s exactly when gold does its job of preserving wealth.

Gold Investment a Safe Bet No Matter What the Fed Does

Yellen’s comments Friday about running a “high-pressure economy” make it clear that inflation moving a point or two above the 2% target will not trigger a rate hike. The Fed Chair also made it clear in remarks a month or two ago that she was not afraid to use negative rates. We are in a unique situation today in that any action from the Fed is likely to boost gold prices.

The Major Catalysts That Influence Gold Prices

Physical gold had its best quarterly gain in 30 years during the first quarter, and year-to-date, even with its recent swoon, physical gold is higher by roughly $200 an ounce. Gold has firmly reestablished itself as being in a bull market. The factors that move gold prices are largely unknown or overlooked. Let’s have a look at the seven most common factors that influence physical gold prices.

The Fed's Measure of Inflation is Furthest from American Reality

Ben Bernanke first set an official inflation target in January 2012, aiming at 2%. Has it been achieved? Well, it depends on how you measure inflation. There are many to choose from. The Fed has chosen the one that is most suppressed and furthest from the experience of most American households. So the Fed can pretend that inflation is “too low,” whatever that means.

Rate Hike Largely Priced into Gold and Silver - What about Rationality in Sell-off?

Could the FED finally raise rates before 2016 draws to a close? That sounds plausible in theory, but there are a number of factors that do not support a rate hike in the near term. But even if they do hike rates, this move is already largely priced into gold and silver. We should question the rationality of this sell off. After all, the gold price often moves higher along with interest rates.

Sticky Price Inflation at Highest Level since 2009 - What it Means for Gold

The common man has little idea of what the price of gold is because he does not fear inflation. Right now, gold is only an investment hedge for institutional players & still trending up since December. If inflation starts to become obvious though & the sticky CPI suggests that this might soon happen, any upside revaluation in the price of gold is likely to be quick & intense.

Rising Commodity Prices Signal Inflation - Purchasing Power Collapse

Asset inflation is increasingly spilling over into commodities, the feedstock for final goods. Unless commodity prices start falling soon, they are certain to drive up record price inflation, despite the lack of economic activity in the advanced economies. The official line, that there is almost no price inflation, is misleading everyone. Monetary inflation withdraws purchasing power from the masses.

Believe it or Not - It’s Way Too Early to Take Profits in Gold and Silver

If another asset appears better positioned to deliver capital preservation or if the risks to capital fade, it will be time to sell some of your physical gold and silver. For now, the risks are extreme, and most other options look awful. Here are a few signs which would signal it is time to lighten up on gold and silver. Simply hold on tightly to your precious metals till then.

Physical Gold, the Misery Index and Monetary Insanity

The official national debt of $19 trillion, measured in gold, is about 15 billion ounces – around 100 times the quantity of gold supposedly stored in Fort Knox. Given the insanity of endless borrow & spend programs, ever increasing debt, overpriced stocks & bonds, desperation & delusions, and more … have you stacked physical gold in preparation for the inevitable consequences?

Inflation Expectations, Fears, are Rising and Markets are Responding

When I ask if inflation is about to make a comeback, what I’m really wondering is if the value of the dollar is about to fall. I prefer these measures not because they are more accurate – although I think they generally are – but because they are more timely. Prices will follow the value of the dollar eventually but the impact on investments is much quicker.

Desperate-To-Hike Fed Admits : Inflation Is Not As Low As You Think

Having now admitted that all of the market-based expectations of inflation are wrong, depending on the importance of the credit channel, the Federal Reserve, by pegging the short term rate at zero, have essentially removed one recessionary market mechanism that used to efficiently clear excesses within the financial system.

Gold, Interest Rates, Price of Oil & Bonds - Here’s All You Need to Know

All the same “macro” issues that drove gold prices up during the 2000s decade are still with us; expansionist monetary policies, out-of-control government spending across the world, growing government debt levels, counter-party risks, looming currency crises & more. Second, we’re in the midst of a major reset across the global gold mining industry.

U.S. Wages Have Fallen EVERY Quarter of the Recovery

What has been difficult to document in a definitive way has been the fall in U.S. wages. The problem is that to express U.S. wages meaningfully, we must use “real dollars”, i.e. adjust these wages for inflation. With the U.S. government only providing nominal data about U.S. wages & consistently lying about the actual inflation rate; there’s a lack of data to make any conclusive statement.

Why Dodgy US Jobs Data is Keeping Gold Prices Down

Low unemployment rate will be used as evidence to prevent the dollar from rising. If the US dollar retains its current strength, then gold prices won’t move higher in the short term. There’s no reason for a mass market movement into hard assets like gold if the US dollar is strong and the official inflation rate is low.

Gold Is Beginning to Lose Less Badly Against the US Dollar

Over the last few years, gold has simply been losing the war against the US dollar. Though gold’s price is stabilizing, its struggle against the US dollar is uphill, and that the dollar still has a strong upper hand. Important moves in gold originate from deep changes in the global monetary and financial system.

Real Interest Rates have a Real Influence on Gold

Does gold respond to the inflation or rather to the real interest rate? Paul Krugman said once that the reason behind the high real price of gold between 2001 & 2011 was low real interest rates, not the expected inflation. Is he right and are real interest rates really the main driver of the yellow metal price? How do they affect the gold market?

Inflation's Not the Only Way Easy Money Destroys Wealth

One of the major negative factors that undermine the real wealth generation is loose monetary policy of the central bank, which boosts demand without the prior production of wealth. The longer the Fed’s loose policy stays in force the harder it is for wealth generators to generate real wealth & prevent the pool of real wealth from shrinking.

Bond Market is taking Advantage of Janet Yellen`s Dovishness

Policymakers have in the past always been mindful to at least talk the market out of being so blatantly one-sided as is so common for Wall Street. Get more Hawkish Yellen, & start at Jackson Hole, as bond market traders are already discounting this speech once again. In short they are taking advantage of your dovishness!

Which way is Inflation Blowing? Watch Commodities

Rapid growth of the money supply usually fuels higher rates of inflation. It’s the narrative about low inflation & weak Gold prices that enables the endless printing of money by central banks. Bubbles in the European and US bond & stock markets can be sustained in the stratosphere, only as long as inflation is “SAID” to be running near-zero.

3 Developing Gold Market Situations to Monitor for the rest of 2014

It has been a good year for gold thus far, but what about the rest of 2014? We are monitoring 3 developing situations that could have a profound impact on gold demand during the remainder of the year — driving forces that could provide impetus for a classic gold run that could begin with a summer surprise.

follow us

markets snapshot


Market Quotes are powered by Investing.com India

live commodity prices


Commodities are powered by Investing.com India

our latest tweets

follow us on facebook