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Msg  257798 of 261475  at  7/18/2022 2:10:37 AM  by

BenTen


 In response to msg 257781 by  kilowatt8
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Re: Gold Outlook

"Right now bad news on inflation is bad news for gold because that means the fed will have to keep tightening and crash everything..... I suppose gold will turn when we eventually see the pivot."
 
 
 
This is what I am thinking now as well. 
 
Fed is tightening.  Are they going to keep going?  How high do they need to tighten to stop inflation from spiraling?
 
And as the economy drops this can snowball so the question is how much of a credit crunch are we going to see and this can pressure gold prices as gold is sold by those that need cash to shore up a credit crunch.  And the sellers may not be just investors but countries.  Sri Lanka comes to mind but know nothing about their central bank gold situation.
 
Just checked food commodites futures - wheat corn soybeans - they have come off highs but it is still looking like inflation levels are steady.  Same for oil it has not crashed they way it would normally when equity market is off this much with Fed continuing to tighten.  But what I am thinking is more likely is the West economies enter into a wage price spiral.
 
When the Fed pivots and starts dropping the Fed Funds rate...am thinking they will have to before the end of this year...and if it looks like endemic inflation at some level then this will be a stimulus for gold prices to move up at least back towards the previous highs.  That is my best guess fwiw...
 
 
 
 


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