Mon-Fri 8am-6pm EST -  Support: 212-391-2211

  • My account
Wallace Precious MetalsWallace Precious Metals
0
  • Home
  • Gold
    • Gold Coins
      • American Gold Coins
      • Canadian Gold Coins
      • British Gold Coins
      • Chinese Gold Pandas
      • Austrian Gold Philharmonics
      • European Gold Sovereigns
      • Gold Bars
    • Other Gold Coins
      • Somalian Gold Elephants
      • Ukrainian Gold Coins
      • Disney Gold Coins
      • South Korean Gold Coins
      • World Gold Coins
  • Silver
    • Silver Coins 1
      • Silver Bars
      • Silver Coins
      • Silver Bars
      • Silver Rounds
      • Silver Statues
      • Silver Bullets
      • Silver Eagles
      • Silver Dollars
      • 90% & 40% Silver Coins
      • Ukrainian Silver Coins
    • Silver Coins 2
      • America The Beautiful Series
      • Canadian Silver Coins
      • Canadian Silver Coins
      • Chinese Silver Pandas
      • Austrian Silver
      • South Korean Silver Coins
      • British Silver Coins
      • Australian Silver Coins
      • New Zealand
      • Gilded Silver Coins
    • Other Silver Coins
      • Solomon Islands Silver Coins
      • Armenian Silver Coins
      • Biblical Silver Coins
      • Cook Islands Silver Coins
      • Rwanda Silver Coins
      • Congo Silver Coins
      • Fiji Silver Coins
      • Native American Coins
      • Disney Silver Coins
      • World Silver Coins
  • Platinum
    • IRA Eligible Platinum
    • Platinum Bars
  • Palladium
  • On Sale
    • New Arrivals
  • Sell To Us
  • Charts
    • Gold Price Charts
    • Silver Price Charts
    • Platinum Price Charts
    • Palladium Price Charts
    • Stock Market Analysis
      • Technical Analysis Charts
    • Commodities Chart Box
  • IRA
  • Other
    • Copper
      • Copper Bars
      • Copper Rounds
      • Wheat Pennies
    • Accessories
      • Bar Accessories
      • Coin Accessories
  • Contact

Ignore Fed tapering, gold investors need to focus on inflation and real interest rates – Commerzbank

Admin
Jun 9, 2021 Precious Metals News Comments Off on Ignore Fed tapering, gold investors need to focus on inflation and real interest rates – Commerzbank


Editor’s Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today’s must-read news and expert opinions. Sign up here!


(Wallace Refiners) – The gold market is making a move back towards $1,900. And with inflation on the rise, one bank said that precious metals investors don’t have to fear the Federal Reserve adjusting its ultra-loose monetary policy.

In a report Monday, Carsten Fritsch, precious metals analyst at Commerzbank, said he remains bullish on gold despite the near-term volatility. He added that he will be closely watching Thursday’s Consumer Price Index (CPI) data as the bank expects inflation is just starting to rise.

“Companies are reporting rising input costs and disrupted supply chains. Our economists, therefore, expect the inflation rate to continue climbing for now and to remain at a very high level into the third quarter before it then begins falling again,” he said.

As a result, Fritsch said that the German bank expects the Federal Reserve to start reducing its bond-purchase program by the fourth quarter, a lot sooner than markets have been expecting.

However, he added that gold investors need to keep an eye on real interest rates, even as the Federal Reserve slows the expansion of its balance sheet.

“We will have to wait a lot longer for [rate hikes] to be forthcoming. Nominal yields will therefore remain well below the inflation rate for some considerable time, leaving real interest rates significantly negative. This is a strong argument in favor of a rising gold price,” he said.

The comments come as U.S. real yields on 10-year notes traded at negative 84 basis points on Friday.

Last month’s annual headline CPI increased 4.2%, its largest increase since September 2008. At the same time, core CPI, which strips out food and energy prices, rose 3%.

Looking ahead, consensus forecasts expect inflation to rise 4.7% in May.

Not only are consumer price pressures are rising, but Friday’s nonfarm payrolls report noted rising wage pressures. Average hourly earnings increased 0.5% last month, following a 0.7% rise in April.

Although the Federal Reserve forecasts that current inflation pressures will prove to be transitory, some economists have said that wage inflation could prove to be a lot stickier than expected.



Disclaimer: The views expressed in this article are those of the author and may not reflect those of Wallace Precious Metals The author has made every effort to ensure accuracy of information provided; however, neither Wallace Precious Metals nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Wallace Precious Metals and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.



Source link

CommerzbankFedFocusGoldIgnoreinflationinterestInvestorsratesrealtapering
admin

Risk sentiment improves heading into the U.S. openPrevious post
Cornish completes test site to extract lithium from geothermal watersNext post

NEWSLETTER

Subscribe to our newsletter to get updates regarding our business and precious metal refining.

MY ACCOUNT

  • Cart
  • Checkout
  • On Sale
  • My account
  • Shop

ABOUT US

  • Sell To Us
  • Careers
  • About
  • Payments
  • Refine Jewelry

Address

Wallace Refiner’s Inc

+1 212-391-2211

15 W 47th St # 101, New York, NY 10036, United States

contact@wallacerefiners.com

©2020 Wallace Refiners - Wallace Precious Metals | All Rights Reserved.

Send Enquiry