PPI data in, CPI stress to follow

15 May, 2024
As at 9am, AEST.

Gold Spot Price $AU3559

Silver Spot Price $AU43.15

Platinum Spot Price $AU1577

The FED released PPI data yesterday, popping up above previous results to serve a year on year result of 3.1% (up from 2.8%). With PPI (or production costs - which ultimately are passed on to consumer costs) increasing, CPI data tomorrow is not looking great. As we’ve discussed previously, rate cuts are most definitely off the table this year and with a higher than expected CPI print tomorrow, we may all be looking towards mid 2025 before any monetary relief from rate cuts.

And the Australian Government knows it as well. Our recent budget is filled with cost of living relief. With so much support being handed out through tax breaks, HECS and family support, I’m unsure if our Government realises they may well be once again causing the inflation they are looking to restrain.

FED chair Powell spoke to the higher than expected PPI results yesterday and commented that ‘The FED is unlikely to raise rates further’ and he ‘expected inflation rates to cool in the coming months.’ So the FED is a while away before they consider cutting rates as well.

Gold and Silver are positioned similarly to the US500 and ASX200, with all 4 now looking to challenge their all time high. We’d suggest that as more CPI data comes forth suggesting higher rates for longer, that higher risk equity markets could respond poorly and put more pressure on share markets worldwide. Gold and Silver are positioned positively to protect in a risk off fashion.

Enjoy today’s charts and forecast below.

Gold daily chart, with 200MDA

Silver daily chart, with 200MDA

US500, with 200MDA

ASX200, with 200MDA

*Not financial advice, please do your research prior to any investment decisions you make.