The gold market has recovered from its lows but remains in negative territory, with little propulsion as statistics from the Federal Reserve Bank of New York emphasized the mounting inflation danger.
The regional central bank revealed the findings of its May consumer expectations poll on Monday. Historically, the report has received little public attention, but markets are wary of the coming inflation danger.
According to the research, median inflation would rise by 0.6 percentage point to 4.0 percent in May 2022. According to the data, this is the seventh straight monthly gain and a new high in the series.
Looking ahead, the survey stated that median inflation predictions for 2024 had risen from 3.1 percent to 3.6 percent. According to the study, this is the second-highest level in this period, behind behind data from August 2013.
Some economists and experts believe the Federal Reserve has done a good job of moderating inflation expectations. Federal Reserve Chair Jerome Powell has stated on several occasions that increasing inflation is expected to be temporary as the economy recovers from the COVID-19 outbreak.
However, the most recent data from the New York Fed casts doubt on such projections.
Despite the fact that gold prices have struggled to break beyond $1,900 per ounce, many market experts continue to see gold as a safe haven from growing price pressures. Many observers believe that inflationary pressures will be more persistent than the Federal Reserve anticipates.
August gold futures last traded at $1,865.50 an ounce, down 0.75% on the day.
While inflation pressures are expected to rise, consumers are not expecting their income to keep up.
According to the survey, the median projected rise in family income reached 2.8 percent last month, the highest level since January 2020. Simultaneously, median household expenditure growth forecasts increased to a series high of 5.0 percent.
“Perceptions about households’ current financial situations compared to a year ago deteriorated slightly in May, with more respondents reporting being financially worse off than they were a year ago,” the report said. “Respondents were also more pessimistic about their households’ financial situations in the year ahead, with fewer respondents expecting their financial situation to improve a year from now.”