After gold hit record highs of £1,679 ($2,085) at the beginning of May, you might have thought that you’d missed your chance to buy gold at a favourable price. Not so. An incredible opportunity to buy has swiftly opened up this week, giving you a second chance to buy the dip before prices once again hit stratospheric levels.
This second chance comes amid rumours that the Federal Reserve may increase rates once again in June, despite previous indications that the cycle would be paused.
Data released yesterday (Thursday) confirmed a somewhat surprising decline in new unemployment claims. The number of new claims filed fell to 242,000 individuals for the week to 13 May, a decline of 22,000 on the previous week’s tally of 264,000. This dip was much sharper than economists had expected, suggesting that the labour market has rebounded to a surprising extent, despite swirling fears of a recession.
The number of people continuing to file for unemployment benefits also declined, falling to 1.799 million people for the week to 06 May, from 1.807 million. This figure highlights a small improvement for the economy, with slightly fewer people now facing a sustained period out of work.
Also contributing to this enormously lucrative window to buy is a rebounding U.S. dollar, which has managed to claw back some of its lost ground on improved economic data.
Two Federal Reserve Presidents, James Bullard and Lorie Logan heaped further temporary pressure on the gold bulls yesterday (Thursday) by dashing hopes of an early summer end to rate hikes – this is good news if you were waiting for your moment to buy gold.
The President of the St Louis Federal Reserve, Bullard brushed away Powell’s earlier indications that May would mark the end of rate increases by saying more work remained to be done. He told the Financial Times, “I do expect disinflation, but it’s been slower than I would have liked, and it may warrant taking out some insurance by raising rates somewhat more to make sure that we really do get inflation under control. Our main risk is that inflation doesn’t go down or even turns around and goes higher, as it did in the 1970s.”
Logan, who is President of the Dallas Federal Reserve, echoed that sentiment saying, “After raising the target range for the federal funds rate at each of the last 10 FOMC meetings, we have made some progress. The data in coming weeks could yet show that it is appropriate to skip a meeting. As of today, though, we aren’t there yet.”
The prospect of one – or possibly more – rate hikes this summer is effectively hemming in the bulls. Having smashed through the price ceiling at the start of the month, prices have dipped to £1,573 ($1,959) this week. Make no mistake, this is a lull. Even at this lower rate, the current price is still 7% higher than the same period last year, with much more to come.
Don’t miss your opportunity to buy the dip while prices are in your favour. Take immediate action. Buy gold now before prices rise.
