Reversal or Pullback that is a question???
It seems Oil and Gold listened to the FED's chair speech yesterday and find their support ..!
History showed during the high inflation era, Energy and Gold outperformed..!
OIL:
Higher oil prices contribute to inflation directly and by increasing the cost of inputs.
There was a strong correlation between inflation and oil prices during the 1970s.
Oil's potential to stoke inflation has declined as the U.S. economy has become less dependent on it.
Oil prices exert a greater influence on producer prices because of oil's role as a key input.
Federal Reserve Chair Jerome Powell said in his semiannual testimony before the U.S. Senate Banking Committee in March 2022 that, as a rule of thumb, every $10 per barrel increase in the price of crude oil raises inflation by 0.2% and sets back economic growth 0.1%. (Investopedia)
GOLD:
Investors have long been enamored by gold and the price of the metal has increased substantially over the past 50 years.
Like most commodities supply and demand is incredibly important, but gold also retains additional value.
Government vaults and central banks comprise one important source of demand for the metal.
Investment demand, especially from large ETFs, is another factor underlying the price of gold.
Gold sometimes moves opposite to the U.S. dollar because the metal is dollar-denominated, making it a hedge against inflation.
Supplies of gold are primarily driven by mining production, which has leveled off since 2016.
Best,
Dr. Moshkelgosha M.D
DISCLAIMER
I’m not a certified financial planner/advisor, a certified financial analyst, an economist, a CPA, an accountant, or a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.
* I have a long position.
History showed during the high inflation era, Energy and Gold outperformed..!
OIL:
Higher oil prices contribute to inflation directly and by increasing the cost of inputs.
There was a strong correlation between inflation and oil prices during the 1970s.
Oil's potential to stoke inflation has declined as the U.S. economy has become less dependent on it.
Oil prices exert a greater influence on producer prices because of oil's role as a key input.
Federal Reserve Chair Jerome Powell said in his semiannual testimony before the U.S. Senate Banking Committee in March 2022 that, as a rule of thumb, every $10 per barrel increase in the price of crude oil raises inflation by 0.2% and sets back economic growth 0.1%. (Investopedia)
GOLD:
Investors have long been enamored by gold and the price of the metal has increased substantially over the past 50 years.
Like most commodities supply and demand is incredibly important, but gold also retains additional value.
Government vaults and central banks comprise one important source of demand for the metal.
Investment demand, especially from large ETFs, is another factor underlying the price of gold.
Gold sometimes moves opposite to the U.S. dollar because the metal is dollar-denominated, making it a hedge against inflation.
Supplies of gold are primarily driven by mining production, which has leveled off since 2016.
Best,
Dr. Moshkelgosha M.D
DISCLAIMER
I’m not a certified financial planner/advisor, a certified financial analyst, an economist, a CPA, an accountant, or a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.
* I have a long position.
Comment:
Today’s trade idea for patrons:
