Gold prices hovered near three-month highs on Wednesday as traders await a fresh fundamental spark to ignite the precious metals next big move.

As the world comes out of lockdown and demand for goods and services rises – traders have now shifted their attention to inflation figures, due for release on Wednesday.

All eyes are now on Consumer Inflation data for April, which is expected to show the biggest year-over-year gain in nearly a decade.

Traders expect the April CPI figures to show a sizzling 3.6% jump on a year-over-year basis. That compares to 2.6% the month earlier.

The Producer Price Index is reported on Thursday and that should confirm a trend of higher prices that is showing up in corporate earnings releases. Another important data point, will be U.S Retail Sales data released Friday.

So far this year, the Fed has maintained their stance to allow inflation to run hotter than its traditional 2% goal, stating that any price acceleration will be temporary. However, if the inflation appears hot when the figures are reported – this could once again ignite the debate about whether the Fed will be forced into winding back its ultra-loose monetary policy sooner than it would like.

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

 

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