All of the financial markets are continuing to react to last week’s CPI inflation report. The CPI increased by 1% in May taking year-over-year inflation higher by 8.6% which is the largest gain since December 1981. The largest inflationary drivers continue to be food, energy, and housing.

Today the U.S. Bureau of Labor Statistics released the CPI (Consumer Price Index) for May. The report confirmed what North Americans have known and been entrenched in; the fact that inflation continues to spiral out of control, and is now at the highest point in 41 years. The CPI rose 0.3% in April.

With tomorrow’s release of the Consumer Price Index by the U.S. Bureau of Labor Statistics and next week’s FOMC meeting many analysts, experts and market participants are extremely concerned that the current inflationary pressures will not subside. More so, they believe that the tools available to the Federal Reserve will not control inflation by raising interest rates to reduce demand.

The Federal Reserve has stated on multiple occasions that decisions regarding revisions to their monetary policies and forward guidance is data-dependent. Lately, the Fed has been focused on combating the current level of inflation, placing their inflationary concerns first and foremost rather than having equal concerns regarding their dual mandate which is maximum employment and inflation.

As of 4:55 PM EDT gold futures basis, the most active August 2022 contract is fixed at $1854.40 which is a net gain of $10.70 or 0.58%. In fact, over the last 13 trading days, gold prices have remained and closed above a key technical study that indicates whether or not a stock or commodity is in a long-term bullish or bearish trend: the 200-day moving average.

Watch part 1 of the panel, where the gold standard and monetary policy are discussed: https://youtu.be/niwxcsqSejw Jeff Christian, Managing Partner of the CPM Group, and Gary Wagner, Editor of TheGoldForecast.com, spoke with David Lin, Anchor and Producer at Kitco News.

A Bloomberg survey of economists indicated that the medium estimate for jobs added in May would show that approximately 318,000 new jobs were added. Additionally, the survey also predicted that the unemployment rate would fall to 3.5%. A Wall Street Journal survey of economists forecasted that employers would add 328,000 jobs in May.

Unquestionably dollar strength or weakness plays an extremely critical role in day-to-day price changes of gold. Intrinsically dollar strength or weakness has an exact correlation to price changes in gold. That is because in North America gold prices are paired against the U.S. dollar.

A substantial move in the dollar nullified market participants from bidding the precious yellow metal substantially higher in trading today. As of 6:30 PM EDT gold futures basis, the most active August 2022 contract is fixed at $1849.70. The gains in gold today were largely muted by extreme dollar strength. The dollar gained 0.80%, or 81 points taking the dollar index to 102.58.

Today’s price decline results in the second consecutive month of lower prices. On a technical basis, the fact that gold tested and briefly dipped below its 200-day moving average brings up a realistic probability that the long-term market sentiment for gold is neutral to bearish.