Daily Gold Market Report

Navigating the Stagflation Terrain:
Economic Indicators and Market Reactions

(USAGOLD – 4/30/2024) Gold prices are sharply lower in early US trading. The precious metals are under strain due to the anticipated hawkish stance of a major central bank meeting starting in just a few hours. Gold is trading at $2303.54, down $31.14. Silver is trading at $26.50, down 65 cents. This recent article from Rabobank, authored by Benjamin Picton, discusses the recent economic data indicating the U.S. might be entering a period of stagflation, characterized by lower growth and higher inflation, with Q1 GDP at +1.6% and core PCE at 3.7%. Despite strong employment figures and government spending, public sentiment towards President Biden’s handling of the economy and inflation is low. The Federal Reserve’s upcoming meeting is anticipated to focus on these national accounts, with expectations of rate cuts influenced by predictions of a recession later in 2024 and potential inflationary policies by Donald Trump if re-elected. Market reactions include a shift in gold prices, with Newmont Mining’s stock rising and a discussion on the return to dividend-paying stocks as an inflation hedge. The article also touches on global economic conditions, including Australia’s inflation and interest rate outlook, Japan’s monetary policy, and the broader implications of higher U.S. rates on global economies and banking solvency.