The traditional cause-effect relationship between inflation and gold prices may not hold true in the current economic climate. Typically, gold has been considered a haven asset and a hedge against inflation, leading to higher prices during periods of inflation. Conversely, gold has historically lost value when reports indicate lower inflation.
The current forecast suggests that tomorrow's report will reveal the lowest level of inflation in the United States in over two years. This outcome is a direct consequence of the Federal Reserve's aggressive monetary policy, which has resulted in 10 out of the last 11 Federal Open Market Committee meetings resulting in rate increases, taking the benchmark interest rate from near zero to between 5% and 5 ¼%.
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