News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
*** GOLD MARKET WIRE ... GOLD MARKET WIRE ***
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US Producer Prices Increased by 6.6% in May... Fastest Pace in a Decade... Year-on-Year PPI Increases 5.3%
US Producer Prices Increased by 6.6% in May... Fastest Pace in a Decade... Year-on-Year PPI Increases 5.3%
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US Bans American Banks from Purchasing Russian Sovereign Debt
US Bans American Banks from Purchasing Russian Sovereign Debt
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*** GOLD MARKET WIRE ***
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Gold Market Wire

News, analysis and commentary for gold traders and investors

Gold Market Update

Gold Spikes on US CPI Data

February 10, 2021 - (Gold Market Wire) - An 8.4% jump in US Gasoline prices has fueled a doubling of the rise in the Consumer Price Index (CPI) in December 2020, rising from a .2% increase to .4%, month on month. Gold prices spiked on the news, taking the market up about $13 per ounce.

the news spike...hourly chart

We certainly can't condone chasing news stories and running after Gold, but we should note that a new market dynamic is coming to the fore: Energy inflation.

So, if the Biden administration wants to choke off oil exploration, refining and transportation, as certainly seems to be the case, this could be the first real taste of a theme that is likely to be repeated for many years - increasing energy prices. Perhaps the Green lobby will now actively try and stop the use of fossil fuels by jamming prices so high no one can afford to travel ever again. If that is the intention, and it would certainly make the Green lobby very happy, then we can expect fuel prices to soar over the next few years. The knock-on into precious metals prices will be all too evident.

Have we taken the first step into a new world of commodity inflation? If recent Agriculture and Oil prices are anything to go by, it looks like the answer is 'yes'.

For the trading book, let's first see if $1850 can be held.

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