Here’s how May 2021 turned sweet for Gold, but will it shimmer in June too?
Here are some more factors that drove the Gold rally this month.
Inflation & Fed Stance:
Higher inflation coupled with Fed’s dovish stance helped gold regain its footing.
With trillions of dollars of stimulus trickling down to the real economy, accelerating vaccination rollouts and unfixed supply chains, higher inflation has become the central market-moving theme so far in 2021.
In the U.S., Personal Consumption Expenditure – which is the Federal Reserve’s preferred gauge for inflation, jumped 3.6% in the year to April. The Consumer Price Index registered a 4.2% growth in April – its largest increase in almost 13 years.
With discussions to increase the minimum wage to $15 from the existing $7.5 underway in the US, we might see wage inflation add to the already spiraling commodity price inflation. This and President Biden seeking to run $1.3 trillion deficits every year throughout the…