US Economic data has sunk, the economy has been slammed with higher oil prices, higher inflation, supply chain issues and corporate profit troubles. The rise of growth fears over high inflation fears will play on the US 10 year interest rate mostly likely keeping rates under 3% if not much lower. Lower 10 yr interest rate tend to mean higher gold prices (chart 1). Peak inflation fear may have passed.
The US dollar has also enjoyed a strong rally on much higher US inflation reports relative to the European Union, however this is changing as inflation in Germany is hitting all time highs and the ECB may have to hike rates faster and further than the FED, likely to send the EURUSD much higher. Also news items like COVID in China and war in the Ukraine are coming to an end, peak fear has passed, which gives more support for a higher EURUSD. Good for gold and silver.
Chart 1: The 10 year interest rate relationship to gold price in US dollars.
Chart 2: Gold price is following the Gann Angles draw from zero (red lines), the blue lines offer a time zone as to the acceleration of price higher.
Chart 3: Forest for the trees standard Gann Angles.
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