Consumer Expectations Are Highlighted by a New York Fed Survey
The Federal Reserve Bank of New York recently conducted a study to measure consumer expectation, and this caught traders’ attention. The survey’s findings revealed that in January, the median predicted rise in household income was 3.3%, down 1.3 percentage points from December. Despite this drop, respondents believed that inflation would still be high at 5%. This emphasizes how real salaries are declining and how individuals are becoming more discouraged about outpacing inflation.
Market effects
As a result of the poll findings, the Dow Jones, S&P 500, and Nasdaq 100 all ended the day in the green. A further sign of probable disinflation in the economy would be the perception of a slowdown in wage growth. On the other hand, speculations concerning stagflation are also a possibility.
Report on US CPI and Gold
The US Consumer Price Index (CPI) data that will be released soon will have a big effect on the gold market. The headline inflation rate is predicted to drop from 6.5% to 6.2% y/y in the report. A drop in bond rates and the value of the US dollar might make today a good day for gold. A technique to forecast CPI utilizing lag analysis was developed in order to better comprehend this phenomena.
Technical Analysis of Gold
Gold has deviated below the 50-day Simple Moving Average on the daily chart. At this time, there hasn’t been any confirmation, though. The upward trend from November may reverse if there is a subsequent fall. On the other side, a reversal can make people pay more attention to the 20-day SMA.