Rising oil prices have changed the market’s view on inflation. As energy costs increase, investors are reassessing the US inflation path, believing that the previous disinflation trend may be interrupted. In this context, expectations for Federal Reserve rate cuts this year have clearly diminished, while expectations for rates to remain higher for longer have strengthened.
Gold Record Plunge! Buy the Dip or Keep Waiting?
The core of gold's price action lies in the renewed constraints on interest rate expectations caused by rising energy prices. As conflicts in the Middle East persist, crude oil prices remain elevated. Against this backdrop, market participants have become more cautious about the disinflation path, subsequently paring back rate-cut bets.
How do you view this recent crash? Should one wait further or enter now? What is your target price for adding to your gold position?
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