Gold To Rise Into The US CPI Print?

By Staff of Seasonax

Seasons, Patterns & Cycles • May 8, 2023 at 7:00 AM EDT

Short Term interest rate markets are seeing nearly 100bps of rate cuts from the Fed this year, helping lift gold higher.

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On Wednesday, May 10 we have US inflation data out and the market is at an interesting point. The USD has been weakening after the Federal Reserve meeting this week on expectations that the Fed has finished its hiking cycle and that a rate cut may happen as soon as July. Short Term interest rate markets are seeing nearly 100bps of rate cuts from the Fed this year, helping lift gold higher. Looking at Seasonax’s risk event tool we can also see that in the day prior to the US inflation print and the day after it, gold tends to gain. So, with gold likely to benefit from falling US rate expectations, a weaker USD, and a weak US CPI print could gold be about to move sharply higher?

Major Trade Risks: The major risk here is that the USD starts to strengthen on any banking fears that return and/or a very high CPI print that will bring expectations of more Fed rate hikes to come.

Video Length: 00:01:49

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