Last week’s data indicates that the US consumer price rose solidly in May. As a matter of fact, it was the biggest annual increase in nearly 13 years. This solid boost was fueled by the economy re-opening, thus increasing the demand for travel-related services. Investors fear that the inflation caused by the massive stimulus bill may begin to take effect. Gold has always worked as a hedge against higher inflation. This concern for inflation boosted the demand for gold, especially in regions like India and China.
The next big event that may affect the price of gold is the Fed's policy meeting on June 15th, which will further clarify the policymaker’s view on rising inflation and economic recovery. In the meantime, the Bank of Japan is keeping its money spigots wide open and further extending its pandemic relief programs to support its economic recovery. Some speculators reduced their net long positions in COMEX gold, which partially contributed to the price dip we’re witnessing today.
We love to hear new ideas from traders and want to know what you think!
If you like this topic and want to suggest future topics that you find helpful, let us know by clicking the ‘submit your feedback’ button below.
Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite.
Nothing contained in this website should be construed as investment advice. Any reference to an investment's past or potential performance is not, and should not be construed as, a recommendation or as a guarantee of any specific outcome or profit.
