by Barbara Kollmeyer
Morningstar Advisor
Gold prices shot to a fresh record on Monday, as investors continued to bank on U.S. interest rate cuts after data showed a key inflation gauge cooling.
Gold futures (GC00) (GCM24) rose just over $40, or 1.7%, to $2,278.30 an ounce. Gold settled at $2,238.40 an ounce on Comex Thursday, the highest finish on record, and the latest in a recent run. Prices ended March 8.9% higher and up 8% for the quarter.
The metal’s “unprecedented rally” has been driver by softer-than-expected U.S. inflation data, that have boosted expectations the Federal Reserve could start cutting interest rates as soon as June, Sergio Avila, senior market analyst at IG, told clients in a note.
(Bloomberg) — Federal Reserve Chair Jerome Powell repeated that the US central bank isn’t in any rush to cut interest rates as policymakers await more evidence that inflation is contained.
On Thursday’s broadcast of CNN’s “AC360,” CNN Political Commentator and former Obama adviser Van Jones said that the economy is an issue where “actual reality and emotional reality have not lined up” for President Joe Biden because while there are many things that “should have people feeling good. Food prices being sticky at the top, housing prices being sticky at the top, make people feel the whole thing is terrible.”
Young people pursuing romantic partners are forgoing traditional first dates and instead meeting virtually online due to the rising costs of social outings, according to reports.
Food prices, both “at home” (think grocery stores) and “away from home” (think restaurants), are up 25% during the Covid period from January 2020. This high cost change of a consumer necessity is cause for recessionary actions.
The price of Easter is nearing a historic high as inflation and supply chain issues send the cost of holiday staples such as eggs and chocolate soaring.
Traders were also cheered by a big jump in Chinese factory activity that fuelled hopes that the world’s number two economy may have bottomed out.
Followers of the Austrian school of economics know that the term inflation refers to increasing the quantity of money or money substitutes. The result being a rise in the price of goods and services or a fall in the value of money. But, in the modern era, this rise in prices is called inflation and as Ludwig von Mises wrote, “This semantic innovation is by no means harmless.” The semantic change has people looking everywhere but where they should to blame for higher prices.
Biggest Drunken Sailors of all. Average interest rate on the Treasury debt spiked but is still only half of what it was in 2001.
When inflation picked back up in January 2024, many commentators described it as more noise than signal. The latest data from the Bureau of Economic Analysis (BEA) casts doubt on that view.