$GLD and $SLV Prices as of May 7 2018 @moneymetals
8:58 AM
May 07, 2018 -- Gold prices lost a bit of ground last week while silver ended nearly flat. All-in-all the performance wasn’t too bad, given the ongoing rally in the U.S. dollar. The greenback has moved off of its mid-February bottom at 88.59 on the DXY index to 92.57 at Friday’s close.
Almost all of that rally occurred over the past three weeks.
The Federal Open Market Committee (FOMC) left the Fed funds rate unchanged following last week’s meeting. Fed officials began prepping markets for higher inflation by announcing the target inflation rate would now be a blend.
Inflation has been below target for years. It is therefore reasonable to expect some years above the target rate.
The decision not to tighten and the prospect of higher inflation didn’t slow the rally in the dollar down. Perhaps investors discounted all of the talk about “symmetric” nature of the target inflation rate as more Fed gibberish.
But much higher inflation is likely on the way. As Greg Weldon, of Weldon Financial, said during our most recent Friday podcast, agricultural commodities and food prices are likely to lead the way. How Fed officials and currency markets deal with price inflation when it actually arrives is a key question for investors.
In the very short run, the dollar’s rally could continue. If that also translates to lower metals prices, it should be viewed as an opportunity to add to a position.
Check out live prices here:
https://goo.gl/sggYF1
Almost all of that rally occurred over the past three weeks.
The Federal Open Market Committee (FOMC) left the Fed funds rate unchanged following last week’s meeting. Fed officials began prepping markets for higher inflation by announcing the target inflation rate would now be a blend.
Inflation has been below target for years. It is therefore reasonable to expect some years above the target rate.
The decision not to tighten and the prospect of higher inflation didn’t slow the rally in the dollar down. Perhaps investors discounted all of the talk about “symmetric” nature of the target inflation rate as more Fed gibberish.
But much higher inflation is likely on the way. As Greg Weldon, of Weldon Financial, said during our most recent Friday podcast, agricultural commodities and food prices are likely to lead the way. How Fed officials and currency markets deal with price inflation when it actually arrives is a key question for investors.
In the very short run, the dollar’s rally could continue. If that also translates to lower metals prices, it should be viewed as an opportunity to add to a position.
Check out live prices here:
https://goo.gl/sggYF1
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