Phil Carr
The Gold & Silver Club
Another day and another highly anticipated money making opportunity. That’s one of the most lucrative trends of the current financial climate that we find ourselves in right now.
With the FOMC Meeting Minutes now behind us – U.S PCE Price Inflation data is hotly anticipated to be the next big market-moving event that traders will not want to miss.
Earlier this month, precious metal prices surged after the U.S Consumer Price Inflation reading rose less than expected in October – boosting expectations that supersize rate hikes are likely now in the rear view mirror.
The cooler-than-expected Consumer Price Inflation data offered some relief to the Fed, potentially indicating that October could be the start of a disinflationary trend that lasts through next year
Precious metal prices received a further boost this month after the Producer Price Index, a key measure of inflation at the wholesale level – rose 8% in October compared to an 8.4% increase in September.
While still historically high, it was the smallest increase since July of last year and significantly better than forecasts. This is the second back-to-back inflation report this month to show signs of cooling in the rising prices that have plagued the economy.
The big question now is will the Fed’s preferred inflation gauge – the PCE price index also come in cooler-than-expected?
Over the last several months, annual inflation as measured by the Consumer Price Index has exceeded that of the Personal Consumption Expenditures Price gauge by the most since the early 1980s – the difference in so-called core inflation is also the widest in decades.
Minutes from the Fed’s November Monetary Policy Meeting, released last week showed that several officials backed the need to slow the pace of rate hikes – signalling a pivot to smaller interest rate increases from as early as December.
Looking ahead, all eyes will firmly be on the PCE Price Inflation reading – as the outcome will ultimately play a very influential role in the size of the Fed's next rate hike.
Right now, precious metal prices are trading in a narrow range, which indicates a big move is on the horizon. The only question now, is which way.
Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:
Trading has large potential rewards, but also large potential risk and may not be suitable for all investors. The value of your investments and income may go down as well as up. You should not speculate with capital that you cannot afford to lose. Ensure you fully understand the risks and seek independent advice if necessary.
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