On Thursday, October 27 the government will release its most recent numbers on Q3 GDP and the most updated numbers on our national debt. Economists and investors will be looking to see how deep of an economic contraction has taken place between Q2 and Q3. The Federal Reserve has been aggressively raising interest rates with the end goal of having an economic contraction.

Gold continues to struggle even in light of a strong decline in the U.S. dollar. Gold had respectable gains in New York trading today, but gave up those gains in Globex trading. By the close of trading in New York today gold had added $15.10 of value and was fixed at $1664. As of 4:30 PM, EDT gold futures basis most active December contract is up only $5.80 or 0.35% and fixed at $1654.70.

Yesterday the BLS released the September CPI inflation report which showed that inflation increased by 0.4% in September. The report revealed that the CPI inflation index was at 8.2% in September year-over-year (YoY), a 0.1% decline from the prior month's year-over-year of 8.3%. However, it was the core CPI that garnered the most attention.

Today the BLS released the September CPI inflation report. The report showed that inflation increased by 0.4% in September which was higher than the forecasts from economists polled by Bloomberg and the Wall Street Journal. Economists were anticipating that inflation would come in at 8.1% year-over-year. However, in this case, the Federal Reserve’s predictions for the CPI were spot on.

The primary driver influencing pricing on multiple asset classes including gold is the fact that inflation remains persistent at a 40-year high. The circumstances that brought the global economy to its knees during the beginning of 2020 was a black swan event. It began as a global pandemic that effectively shut down the world’s economy and led to a major global recession.

At least according to Chicago Fed President Charles Evans, the Fed may still be able to lower inflation without a sharp rise in unemployment and without pushing the economy into a recession. An assumption that only a few believe.

The jobs report for September showed a decrease in monthly gains, with 263,000 new jobs added last month, a decline from the prior month in which 315,000 new jobs were added. However, the spin of these numbers by the Federal Reserve as well as members of the press is that last week’s jobs report indicated Strong employment figures which sent stocks tumbling.

Today’s jobs report for September showed a decrease in monthly gains, with 263,000 new jobs added last month, a decline from the prior month in which 315,000 new jobs were added.

There is an adage when investigating a crime that says to “follow the money”. In the same way, when investigating where gold prices will be headed short-term it is wise to follow the upcoming reports. Two key reports will shape the short-term direction and price of gold.

We have seen the gold prices move up approximately $100 since the low that came in last Wednesday. As we spoke about on yesterday's show, we will look to enter a long position in December gold on a dip. Today’s low came in at $1708 which is why we believe on one more move down we could easily trade to $1700 to $1705 in which we would execute the limit order.