For gold traders and investors, the data points on inflation, such as the US Consumer Price Index (CPI) and the preliminary inflation expectations released by the University of Michigan, will determine the level of bullishness. Bloomberg Intelligence commodity czar, Mike McGlone, took to Twitter to share his view on what potentially could cause a gold rally.
Stock market is the key
According to McGlone, a potential force that could push the Federal Reserve (Fed) to ease the tightening cycle could be a deflating stock market; furthermore, the tightening cycle is often viewed as resistance to a gold rally. He also added: If inflation data comes in lower than expected, a potential rally in stocks could occur, and whether that precipitates a fall in gold prices will remain to be seen. History often repeats itself; however, a short-term stock market rally doesn’t have to necessarily mean doom for gold prices. Buy stocks now with Interactive Brokers – the most advanced investment platform Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
