As the weekend draws closer the gold bulls aren’t showing any signs of slowing down. Gold prices are elevated and continue to ease back towards this month’s high of £1,627 ($2,014) as the U.S. dollar slides. The greenback is struggling to find any kind of momentum and is trading lower on rising recession fears.
Senior Currency Analyst Joe Manimbo says we could be seeing the beginning of the end of interest rate hikes, which spells bad news for the dollar but boosts the bulls. “he U.S. dollar carved out fresh session lows after weaker than expected data bolstered the argument that the Fed may be done raising interest rates.”
Pantheon Economics chief economist, Ian Shepherdson believes the worst lies ahead. Speaking yesterday (Thursday) he said, “The level of claims remains extremely low, but the cycle bottom probably is now in the past, and looking ahead, the lagged impact of the surge in layoff announcements ought to drive claims substantially higher during the second quarter. The surge in announcements [regarding layoffs] is huge, so the claims numbers likely will look very different by the end of the second quarter, and perhaps a good deal sooner.”
Of course, mass job cuts is often an early sign of an economic slowdown. The latest round of personal consumption and expenditures (PCE) data will be released this afternoon and should provide a good indication as to whether or not that’s the case.
Gold thrives in this environment so it’s only a matter of time before the previous record high prices are breached. Buy now.
