gold red flag

The U.S. economy shrank at an annual rate of 1.4% in the first quarter of 2022 with inflation at 8.5%. This is the beginning of stagflation.

The fed reserve raised rates and the gold price is retreating. There will likely rate rise onThursday by .5 to 1% which will likely cause gold could fall to 1750 within 10 days.

This shows when rates go up gold quickly declines as an inflation hedge.

My predictions.
1. The fed will continue to raise rates to reduce inflation with little effect.
2. Inflation will rise as the cost of business increases due to increased financing costs which will counter rate rises to reduce inflation.
3 The gold price will fall at first but rebound as inflation continues unless the USA enters a recession in which case gold will continue to fall. Could result in a gold sell off.



The fed will likely raise rates on Thursday and gold will tumble as will share prices.
The RBA will probably need to call an emergency meeting in Australia to raise rates to prevent the Aud falling too low.
If the RBA does nothing in response the Aud could fall to mid low 60s, this could cause high inflation and eventually a liquidity crisis.

At this point in time the gold price falling is being offset by the Aud falling but the RBA will need to take some action soon.