The gold market is up just over 1% this week, taking back the reaction from a key technical zone. Stronger-than-expected headline inflation data on Friday have been the catalyst for the recent rise in price. In this article, you can find weekly economic and financial comments to watch for gold and Bitcoin.
Weekly comments for Gold and Bitcoin
USA: Prices rose in May, small sign of help for consumers
Consumer price index rises more than expected and annual inflation rate is 40 Consumer price inflation continued to rise in May, with the raising to the highest level of the year. Consumers continue to feel the squeeze of higher prices, evident in the persistent deterioration in consumer sentiment. To date, households have demonstrated an uncanny resilience to inflation. But with little sign of a sudden relief in prices, analysts think the fight against inflation will get harder.
Next week: Retail Sales (Tue), FOMC Rate Decision (Tue), Housing Starts (Wed)
International: European Central Bank prepares for rate hike as Reserve Bank of Australia supports
In its latest announcement, the European Central Bank took another step towards normalizing monetary policy this week. Additionally, the ECB said it plans to raise rates by 25 basis points in July, perhaps more in September, and to deliver a steady series of rate hikes over time. As reported by Kriptokoin.com, the ECB surprised the markets with a 50 basis point increase in interest rates, which is larger than expected to be followed by a 50 basis point increase in its announcement in July.
Next week: UK GDP (Mon), China Retail and Industrial Activity (Wed), Australian Employment (Thu)
Interest rate monitoring: SNB and BoE holding policy meetings next week
- Swiss National Bank will be on hold next week, according to analysts. However, it is expected that SNB will start a tightening cycle later this year. Additionally, the Bank of England is expected to raise interest rates by 25 basis points on Thursday.
Credit market insights: Consumer credit up, household net worth down
- Consumer credit had another strong month in April, rising to $38.1 billion. A near-record increase only trumped the previous month’s unprecedented increase. Meanwhile, household balance sheets fell in the first quarter as household net worth fell for the first time since Q1-2020, when COVID first hit.
Topic of the Week: Budget deficit narrowed
Fiscal year 2022 is now almost three quarters complete. At the same time, the federal budget deficit narrowed significantly. Analysts’ forecasts are for the Fed to face a $900 billion budget deficit in fiscal 2022. If this happens, there will be a smaller deficit than that prevailed prior to the pandemic.
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