Gold Prices: Shored Up On Weak Data

Consumer price data out on Thursday defied many of our expectations. Inflation data was softer than expected, rising 0.2% vs the 0.3% expected.  This translates to 1.8% inflation per year, slightly below the Fed’s target of 2%.  The report knocked the dollar down, which boosted gold prices through their usual fundamental relationship.

Here’s a big clue to careful readers: When news like this comes out, watch what gold options or futures prices do for contracts 3, 6 and 12 months out.  If the gold futures price doesn’t move about the same amount in the same direction, it means market sentiment believes something more important is going on.

This Gold Enthusiast can’t overstate how important these clues are to understanding where the market is likely headed in those time frames.  Today’s featured article tells the story of yesterday’s news from the gold perspective, while this article gives the view from the consumer price side.

 Related: Is Silver the New Gold?

About the author

Mike Hammer

Mike Hammer has had a wide-ranging career, with trading and investing as a continuing theme. Mike graduated from UC Berkeley with a business degree, then worked with Macy's in their operations arm. He left Macy's and spent a summer trading his own account, which taught him a lot about trading in general and markets in particular. Trading through the Black Monday and the Crash of 1987 showed him how most people are unprepared for upheavals in their trading. He then joined Waddell & Reed as a financial advisor, helping regular people understand their finances and meet their life goals.

Then came the usual story - Mike met and married the lady of his dreams. They moved to upstate New York, where Mike worked first for a small manufacturing consulting company, then Cornell University. While loving the work and the higher-education atmosphere, Mike missed the world of finance. Eventually, he signed up for stock trading coaching with the Adam Mesh Trading Group, to learn from people who understood modern markets. Within a year, Adam asked Mike to become a stock trading coach.

Since then, Mike has trained over 200 individuals, spoke at several national conventions, and is a frequent contributor to conference calls across the Adam Mesh community. Mike writes The Gold Enthusiast daily newsletter, runs the Golden Hammer trading service, and participates in the Mesh Private Portfolio. He also keeps a position in international education which keep him in touch with "the student mindset". Mike closely follows the gold, energy, and financial sectors. His motto is "Plan your trade, then trade your plan!"

Leave a Comment