Gold 4 May

2023年5月4日

Today we have Exports and Imports which shows if a country is having a good or bad economy, Also we will have Jobless claims witch if the number comes higher means its deflationary which leads us to have a buy on gold but if its lower its inflationary so we should sell gold. This can be shown by the circular flow of money model.

The "possibly" last 25 basic points interest rate increase have been delivered as expected. Powell seems worried since this time he was not able to provide any clear guidance witch is a bit worrying,
Im not surprised as given the most recent economic events of global COVID lockdowns, supply/demand shocks, banking turmoil, mixed data, stubborn inflation and the fastest monetary tightening in the 109 years since the FED exists no one knows whats coming this year.
Professionals are still trying to assess the damages and potential scenarios of the economy and how it will or could happen, tho to be honest no one knows

As Powell said: In light of these uncertain headwinds, along with monetary policy restraint we put in place, our future policy actions will depend on how events unfold.

In conclusion, Powell says that tough times may come but with the banking turmoil it could be worse than we all expected. Therefore, the FED pulled the breaks with the rate hikes but left the door open to deliver more hikes IF the data shows further overheating of the economy.
The most likely scenario will be a stagflationary period with slow growth with persistent inflation and tighter credit conditions for households.

For now we will sit and wait to see what the data and macroeconomics will tell us since this is the only way to find profitability in this markets for the next few years. Focus more on fundamentals and data then technical but do put emphasis on all.