Ever since QE, the textbook economic theories are out of the windows. I don't think there was ever a study of what QE can bring out in the debate on the theories. In practise, we now know it isn't inflationary. In fact for years of QE 1-3, Feds were actually wanting inflation! The irony is that it took a pandemic to actually triggers the reading of 5% annualised inflation but the economy was coming off a very low base and NFP readings are most likely obscured by how many dropped off looking for work or dis-incentivised by the Govt handouts! Even if we have a good idea, I am more interested in what the market thinks and react because going against them is a very expensive exercise.
AUDUSD is not doing any more of the heavy lifting in XAUAUD as gold drop is usd is out performing AUD strength v USD.
You can see our tier 1 gold producers are following this gold quote, currently not able to signal that the bull trend is continuing. ore of a wide ranges. I had suffered 6 months og gold weakness and just when I thought XAUUSD has broken out into a new up trend, it gets slammed by the CPI readings and ironically should have reactively positively by the inflation read!
It is now over to next week's FOMC for probably more gold buggering. I decided to clear out some exposure that did not recover in the speculative end of town. Let's see how next week pand out.
