Precious metals hammered as investors digest new aggressive rate hikes kitconews gold silver finance metals investing mining economics
Market participants are still digesting the financial shockwaves resulting from yesterday’s CPI report. The inflation report revealed that inflationary pressures for goods and services said that inflation is running at a scorching level of 9.1% year on year. Many have never lived through a time in which inflation was this elevated because this is the highest level of inflation since November 1981.
The PPI measures the average change over time in the prices domestic producers receive for their output. Simply put, it is a measure of inflation at the wholesale level. Therefore, it means that there is a small-time lag between when the end product reaches the consumer market and therefore impacts purchases in the future.
The CME’s FedWatch tool paints a slightly different picture. This probability tool is predicting that there is a 57.2% probability that the Fed will raise rates by 75 basis points and a 42.8% probability that they will raise rates by 100 basis points in July. However, when we look at the big picture it is also predicted that there is a 53.3% probability that by the conclusion of the September FOMC meeting interest rates will be between 3% and 3 ¼%.
Gold and silver pricing will remain under pressure through this period because the dollar will strengthen as interest rates move higher and there is a 100% negative correlation between the value of the dollar and gold prices. This is because the dollar is paired against gold and therefore a direct correlation between dollar strength in gold weakness or dollar weakness in gold strength.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Posthaste: Royal LePage cuts home price outlook 'significantly' on aggressive Bank of Canada rate hikesRoyal LePage forecasts prices will rise 5% in 2022, compared to its previous forecast of 15%. Find out more.
Read more »
Posthaste: Royal LePage cuts home price outlook 'significantly' on aggressive Bank of Canada rate hikesRoyal LePage forecasts prices will rise 5% in 2022, compared to its previous forecast of 15%. Find out more.
Read more »
Posthaste: Royal LePage cuts home price outlook 'significantly' on aggressive Bank of Canada rate hikesRoyal LePage forecasts prices will rise 5% in 2022, compared to its previous forecast of 15%. Find out more.
Read more »
Decoding the Bank of Canada’s supersized interest rate hikeThe Globe and Mail’s Mark Rendell tells us what the central bank is trying to do with its most aggressive interest rate hike since 1998
Read more »