Oil goes up, everything goes up and a big week for news

Oil prices continue to climb, upwards through $US90 all the while putting upward pressure on pricing for everything else.

CPI, PPI, Budget deficits, and retail sales all combined into an amazing week of news - which we’ll talk about today.

CPI and PPI have caught everyone’s attention ever since inflation became a daily topic of discussion, and this week’s result will keep everyone talking about it in the future. CPI lifted to 0.3% for the month, above estimates of 0.2% - suggesting inflation isn’t perfectly under control.

PPI jumped to 0.7% for the month (most alarming), above estimates of 0.4%. With both consumer and production indexes reporting above estimates, the FED will be very carefully reviewing its plan of attack in the next few months.

To reinforce ongoing concern about inflation, US retail sales reported for the month were also alarming. As we would expect consumer spending to decline from continued interest rate increases, retail sales actually increased 0.6% for the month, beating estimates at 0.1% and again either showing the resilience of the US consumer or the total lack of concern/care of the consumer in the face of more and more cost of living pressure. This phenomenon has also been observed in other countries, where the cost of living increases so dramatically, that consumers ‘seize the day’ and simply spend their earnings to enjoy life today, knowing that tomorrow they probably won’t be able to afford the same purchase.

The Budget deficit threw a curveball for the month, at first glance showing a surplus of $89B. On the second view, the monthly surplus was a result of a technical government account - or more simply put ‘a rounding error’.

Regardless of reporting, the US economy is on track to exceed a $ 1.5 trillion deficit leading into the end of the year. Spokespeople for the US Congressional Budget Office suggest that the US deficit will exceed $ 2 trillion into the coming year - and that’s excluding any Student Loan Planning that is also being considered. Gold and Silver have reacted in a confused manner to the above news, with both metals seemingly following the existing pattern they have already set. Both precious metals are reaching previous lows in their cycles, perhaps giving great buying opportunities, especially on the back of this week's news from the US.

You'll find today's technical analysis and charting below for your reference.

Gold, with 200MDA

Silver, with 200MDA

Gold Futures Technical Analysis

Gold Futures monthly analysis continues to recommend a STRONG BUY with Weekly analysis of a BUY signal.

Technical indicators - Monthly Projections

Summary for Monthly Forecast: Strong Buy

Disclaimer 

This news and any links provided are for general information only and should not be taken as constituting professional advice from Jaggards. Jaggards is not a financial adviser. We recommend you seek independent financial advice before making any financial decisions based on the information contained in this article.