The March U.S. Consumer Price Index rose 8.5% and the Producer Price Index surged 11.2%, the most on record.
from Seeking Alpha
Gold’s traditionally positive performance in an inflationary and rising rates environment is hindered by the strength of the U.S. dollar.
Gold Gets Caught Up In The Action
Central banks are tightening, the global commodities shock is intensifying, and over the first few days of April the 2/10 treasury yield curve – i.e., the spread between the U.S. 2-year and 10-year treasury yields – turned negative. Historically, these have been harbingers of a slowing economy or recession. Traditional safe havens, gold and the U.S. dollar, trended higher in early April. Gold tested the $2,000 per ounce level with an intraday high of $1,998 on April 18. While the U.S. Dollar index (DXY)1 went on to test its 20-year highs, the gold market pulled back when, on April 21, U.S. Federal Reserve Bank (Fed) Chair Jerome Powell sent a strong message at an International Monetary Fund (IMF) gathering where he indicated that more aggressive hikes in interest rates are needed, presumably to fight inflation.