Consumer price index indicates rising inflation

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Consumer price index indicates rising inflation


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This morning, the US Bureau of Labor released its most recent Consumer Price Index for March. Inflation via the CPI has exceeded economists’ expectations. Figures showed the CPI gained + 0.6%, which was 10 points above consensus and the highest monthly tally since June 2009. Compared to year over year, which is considered a more modest measure of inflation, the CPI is + 2.61%.

According to the United States Bureau of Labor Statistics, “the gasoline index continued to rise, increasing 9.1% in March and accounting for almost half of the seasonally adjusted increase in the gasoline index. together. The natural gas index also rose, contributing a 5.0-percent increase in the energy index during the month. The food index rose 0.1 percent in March, with the home food index and the out-of-home food index both rising 0.1 percent. ”

According to Reuters, “the gasoline index continued to rise, increasing 9.1% in March and accounting for almost half of the seasonally adjusted increase in the All-items index. The natural gas index also rose, contributing to a 5.0% increase in the energy index on the month. The food index rose 0.1 percent in March, with the home food index and the out-of-home food index also increasing 0.1 percent. “

Both the CPI and the weak dollar were major factors in the rise in gold and silver futures. As of 5:36 p.m. EST, the most active June 2021 Comex contract is set at $ 1,746.20, after factoring in the current gain of $ 13.50 (+ 0.78%). Based on silver futures, the most active May contract has gained nearly $ 0.54 (+ 2.16%) and is currently pegged at $ 25.405. The dollar lost 0.314 points in trading today and is currently pegged at 91.83. In addition, the 10-year US Treasury note has fallen 3.9 basis points and currently has a yield of around 1.62%, falling after the release of today’s CPI data.

Spot or forex gold, according to the Kitco Gold Index, gained $ 13.10 today. On closer inspection, the weak dollar was $ 4.85 with the remaining gain of $ 8.25 directly attributable to traders who offered the precious metal higher. Cash or forex money is currently pegged at $ 25.33. Only $ 0.07 can be attributed to the weak dollar, with the remaining $ 0.47 being a direct result of trading activity.

The question with the most recent CPI figures is whether inflationary pressure is temporary or whether inflation will continue to rise. Fawad Razaqzada, market analyst at ThinkMarkets, said: “Inflation is likely to accelerate and the numbers for the next few months may look unusually high as the base effects of the 2020 lockdowns skew the data.”

The Federal Reserve’s revised mandate indicated that it would let inflation rise above its old benchmark of 2% instead of focusing on its maximum employment mandate. This will undoubtedly continue to have a bullish effect on gold and silver.

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Wishing you, as always, good trading and good health,

Warning: The opinions expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not a solicitation to effect an exchange of commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no responsibility for any loss and / or damage resulting from the use of this publication.

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