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Blowout CPI Triggers False Reaction In Metals

Published 02/10/2022, 01:55 PM
Updated 07/09/2023, 06:31 AM

5 months ago, gold would plummet $50 on the mere mention of Fed tapering. Today, after another blowout US CPI, gold rallies alongside silver despite a 70% chance of a 50-bp rate hike next month. 

Gold’s ability to survive through the tightening landscape (especially flattening yield curves) reminds me of Bitcoin's ability to fight back in 2019 and 2020 despite stolen coins, shut down exchanges, and extraordinary volatility. 

GBP, Silver Daily Charts

The other thing I want to highlight is the similarity between daily charts of GBP/USD and XAG/USD.

I remained long GBP/USD as long as the right shoulder support of 1.3350 held up. And it did just that before mounting a solid recovery ahead/after the BoE decision. Our bullishness in gold and silver was maintained as long as XAU/XAG failed the 82 resistance

Latest comments

just surprised at the strength in dollar considering the inflationary influences that a rate hike might make more pronounced since inflation today is largely the result of a choked supply chain.. will be interesting how the fed reacts on Friday
no wonder with the inflation of 7%
thanks for
false reaction,!!!!!who will believe such numbers while inflation at the highest point and dollar losing strength????, just monitor if interest rate increase in March u will have same movement
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