Key Takeaways
- The spot price of gold headed lower Monday, reversing a two-day rally amid concerns about inflation and how it may affect the Federal Reserve’s stance on interest rates.
- Consumers anticipated steeper price increases over the coming year in April than they did in March, according to a survey by the Federal Reserve Bank of New York.
- A Bloomberg survey found that gold was the leading inflation hedge identified by respondents, followed by big tech stocks.
The spot price of gold reversed two days of gains, dropping about 1.1% to $2,335.53 per ounce as of 4:30 p.m. ET Monday amid concerns about inflation and the potential impact it could have on the Federal Reserve’s stance on interest rates after a report from the Federal Reserve Bank of New York found consumers anticipated steeper price increases over the coming year in April than they did in March.
Consumers Raise Inflation Outlook
A study from the New York Federal Reserve showed consumers in April raised their estimate of where inflation will be in the short and long term. That news came ahead of this week’s reports on producer and consumer prices, all of which could influence when policymakers finally begin lowering borrowing costs again.
Respondents to the New York Federal Reserve’s Survey of Consumer Expectations in April said they saw inflation a year from now at a 3.3% annual rate, up from 3% in March. They said they expected that in five years, the rate will be at 2.8% versus a forecast of 2.6% the month before.
The Labor Department releases its April report on producer prices Tuesday, with consumer price data for last month coming on Wednesday.
Gold Seen as Top Inflation Hedge, Followed by Big Tech, Survey Shows
Gold has managed to maintain its lead in being perceived as the top hedge against inflation, though big technology stocks are also highly regarded, a recent survey of Bloomberg readers suggested.
Bloomberg’s latest Markets Live Pulse poll found that when asked which asset best protect against inflation, 46% of participants picked gold, while 30.4% went with U.S. tech-giant stocks such as Nvidia. Bitcoin was the choice of 5.1%, while other options captured 18.1%.
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