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On November 14th, analyst Tracy Alloway stated that while the price of imported bananas in the US has actually been declining since the middle of last year, banana inflation remained high at 6.9% as of the end of September. Even with lower production costs, companies may not necessarily pass on cost savings to consumers, and there are currently no signs that most companies feel pressured to do so. Data shows that profit margins for S&P 500 companies actually expanded in the most recent quarter, triggering a significant secondary effect: higher profit margins boosted stock prices, creating a wealth effect where wealthier consumers could freely purchase expensive bananas, further increasing consumer spending. At the same time, companies are more inclined to maintain high-price strategies, which harms the interests of low-income families. Simply eliminating tariffs may not satisfy ordinary consumers worried about prices. If you expect immediate results from eliminating banana tariffs, you may be disappointed.According to Futures News on November 14, the holdings of the worlds largest gold ETF, SPDR Gold Trust, increased by 2.29 tons from the previous day, and the current holdings are 1048.93 tons.According to Futures News on November 14, the worlds largest silver ETF, iShares Silver Trust, increased its holdings by 84.65 tons from the previous day, with its current holdings at 15,173.28 tons.The Central Bank of Peru kept its benchmark interest rate unchanged at 4.25%.The mayor of Kyiv, Ukraine, said that Kyivs air defense forces are responding to a "massive" Russian attack.

Gold Price Prediction: XAU / USD will continue to fluctuate above $1,900 despite a decline in US Inflation

Daniel Rogers

Mar 15, 2023 11:43

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Gold price (XAU / USD) is not in danger despite U.S. inflation figures meeting expectations. Since Monday, the precious metal has been fluctuating continuously between $1,895 and $1,913. The release of the US Consumer Price Index (CPI) failed to produce a significant reaction in the Gold price; however, the upside bias appears to be solidified as wagers on lesser rate increases from the Federal Reserve (Fed) have increased.

 

The US Dollar Index (DXY) is protecting the critical support at 103.50, but it appears vulnerable to further losses as investors' risk appetite has dramatically increased. As market participants purchased S&P500 futures in response to higher odds of a smaller rate hike from Fed chair Jerome Powell, a likely recession in the US economy was postponed, signaling an uptick in optimism.

 

Contrary to the risk-on sentiment, demand for US Treasury bonds remained weak, causing 10-year US Treasury yields to rise above 3.68 percent.

 

The headline As anticipated, the US CPI increased by 0.4% on a monthly basis, and the annual figure decreased from 6.4% to 6.0%. In addition, the core CPI, which excludes crude and food prices, decreased to 5.5% from 5.6% previously. The Fed appears to be pleased with the persistence of a declining trend in US inflation.

 

In the future, investors will closely monitor the US Retail Sales (Feb) data. Monthly Retail Sales data is anticipated to decline by 0.3% compared to the previous release of a 3.0% increase. This indicates that the consumer spending rebound is over and the Fed is on course to achieve its inflation target of 2%.

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