Inflation is still too hot; what does this mean for gold? inflation gold
- Last week we warned investors that they should expect to see lower gold prices in the short term. We have been proven right so far as the precious metal tests support just above $1,800 an ounce.
Michael Wilkerson, Founder of Stormwall Advisors and Author of Why America Matters: The Case for a New Exceptionalism, told Kitco News's editor-in-chief Michelle Makori that inflation could rise as high as 12% this year. The CME FedWatch Tool shows that markets see a 27% chance of the Federal Reserve raising interest rates by 50 basis points next month. While the odds are still low, they have risen dramatically; a week ago, markets saw an 18% chance and last month, there was less than a 3% chance.
While gold's near-term prospects look pretty dismal, it is also important to remember that the precious metal is more than just a play on interest rates. It remains an important portfolio diversifier as it continues to outperform equity markets.
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