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Gold

Prices that producers charge (PPI) for their goods in the U.S. spiked higher by 0.6% last month, double the rise in January of + 0.3%. According to the Bureau of Labor Statistics, the final demand index (what consumers pay for a product) rose by 1.6% year-over-year, the largest rise since moving up 1.8% year-over-year in September 2023.

Yesterday, gold traders and investors aggressively took gold $25 lower and $37 lower during the intraday low. This was a knee-jerk reaction to the government’s release of the most current inflationary data, the CPI. Although economists polled by Reuters and Dow Jones predicted that February’s inflationary pressures would increase.

In yesterday’s article, the primary focus was on the impact that the upcoming CPI report would have on multiple financial sectors including gold and the dollar. We spoke about a single Japanese candlestick, a “doji” which occurred yesterday in the daily Japanese candlestick chart of gold futures, and on Friday in the dollar index.

Gold traders and investors are acutely aware of the dynamic impact that tomorrow’s CPI report will have on multiple financial sectors, including gold prices. Gold futures basis, the most active April contract traded to a higher low, and a lower high than Friday.

Chairman Powell along with other Fed officials has been conveying a unified narrative, that inflation is “not far” from where it needs to be for the central bank to pivot from a restrictive policy to its first rate cut. Today’s jobs report reinforces and strengthens the likelihood of the first rate cut by the Federal Reserve by June of this year.