{"id":188,"date":"2023-01-27T20:31:14","date_gmt":"2023-01-28T01:31:14","guid":{"rendered":"https:\/\/embarrdowns.com\/?p=188"},"modified":"2023-01-27T20:31:15","modified_gmt":"2023-01-28T01:31:15","slug":"us-economy-starts-2023-with-stagflationary-flavor-what-does-this-mean-for-gold-and-silver","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/us-economy-starts-2023-with-stagflationary-flavor-what-does-this-mean-for-gold-and-silver\/","title":{"rendered":"US Economy Starts 2023 with Stagflationary Flavor: What Does This Mean for Gold and Silver?"},"content":{"rendered":"

The US economy has started the year 2023 on a disappointing note, with business activity in both the manufacturing and services sectors contracting sharply in January.[0]<\/a><\/sup> Despite economic data released this past week showing that consumer demand was falling and wholesale prices were cooling, the Federal Reserve\u2019s policy tightening efforts appear to be working.[1]<\/a><\/sup><\/p>\n

In January, the US Services Business Activity Index rose to 46.6 from 44.7 in December 2022.[0]<\/a><\/sup> Retail sales fell by 1.1%, following a 1.0% decline a month earlier, and Real Retail Sales fell at a -2.5% annual rate in Q3 and Q4.[2]<\/a><\/sup> Industrial Production dropped by -0.8% in December, following a decrease of -0.6% in November.[2]<\/a><\/sup><\/p>\n

The Fed is expected to raise rates by 0.25 percentage points on Wednesday, and the market is split over whether to raise rates by a further 0.5 percentage points or step down to a quarter-point increase.[3]<\/a><\/sup> However, the data indicates that the private sector contractions continued into the new year and that inflationary pressure is increasing, creating a stagflationary flavor.[0]<\/a><\/sup><\/p>\n

What does this mean for gold and silver outlook for 2023?[0]<\/a><\/sup> The price of gold has been rising recently on hopes of a more dovish monetary policy and a Fed pivot.[0]<\/a><\/sup> Any hawkish surprise could send gold prices down, but the dovish outlook is more likely considering that the most prominent hawks aren\u2019t voting in 2023.[4]<\/a><\/sup> Ultimately, it\u2019s too early to declare the comeback of inflation as input costs accelerated, but it hasn\u2019t translated into higher output prices yet.[0]<\/a><\/sup><\/p>\n

0. <\/span>“The Fed\u2019s crossroads \u2013 hawkish or dovish?” FXStreet, 25 Jan. 2023, https:\/\/www.fxstreet.com\/analysis\/the-feds-crossroads-hawkish-or-dovish-202301251827<\/a><\/a><\/p>\n

1. <\/span>“The Fed and the Markets Disagree on Wages and Inflation. That\u2019s a Problem.” Barron’s, 20 Jan. 2023, https:\/\/www.barrons.com\/articles\/federal-reserve-markets-wages-inflation-51674238963<\/a><\/a><\/p>\n

2. <\/span>“Markets To Fed: We’re Easing Whether You Like It Or Not” Forbes, 21 Jan. 2023, https:\/\/www.forbes.com\/sites\/greatspeculations\/2023\/01\/21\/markets-to-fed-were-easing-whether-you-like-it-or-not<\/a><\/a><\/p>\n

3. <\/span>“The Week Ahead: Fed, BoE, ECB interest rate decisions; Shell, BT, US tech results” CMC Markets, 27 Jan. 2023, https:\/\/www.cmcmarkets.com\/en-ie\/news-and-analysis\/the-week-ahead-fed-boe-ecb-interest-rate-decisions-shell-bt-us-tech-results<\/a><\/a><\/p>\n

4. <\/span>“The Fed’s Crossroads – Hawkish Or Dovish? | MENAFN.COM” MENAFN.COM, 26 Jan. 2023, https:\/\/menafn.com\/1105478676\/The-Feds-Crossroads-Hawkish-Or-Dovish<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The US economy has started the year 2023 on a disappointing note, with business activity in both the manufacturing and services sectors contracting sharply in January.[0]<\/a><\/sup> Despite economic data released this past week showing that consumer demand was falling and wholesale prices were cooling, the Federal Reserve\u2019s policy tightening efforts appear to be working.[1]<\/a><\/sup><\/p>\n

In January, the US Services Business Activity Index rose to 46.6 from 44.7 in December 2022.[0]<\/a><\/sup> Retail sales fell by 1.1%, following a 1.0% decline a month earlier, and Real Retail Sales fell at a -2.5% annual rate in Q3 and Q4.[2]<\/a><\/sup> Industrial Production dropped by -0.8% in December, following a decrease of -0.6% in November.[2]<\/a><\/sup><\/p>\n

The Fed is expected to raise rates by 0.25 percentage points on Wednesday, and the market is split over whether to raise rates by a further 0.5 percentage points or step down to a quarter-point increase.[3]<\/a><\/sup> However, the data indicates that the private sector contractions continued into the new year and that inflationary pressure is increasing, creating a stagflationary flavor.[0]<\/a><\/sup><\/p>\n

What does this mean for gold and silver outlook for 2023?[0]<\/a><\/sup> The price of gold has been rising recently on hopes of a more dovish monetary policy and a Fed pivot.[0]<\/a><\/sup> Any hawkish surprise could send gold prices down, but the dovish outlook is more likely considering that the most prominent hawks aren\u2019t voting in 2023.[4]<\/a><\/sup> Ultimately, it\u2019s too early to declare the comeback of inflation as input costs accelerated, but it hasn\u2019t translated into higher output prices yet.[0]<\/a><\/sup><\/p>\n

0. <\/span>“The Fed\u2019s crossroads \u2013 hawkish or dovish?” FXStreet, 25 Jan. 2023, https:\/\/www.fxstreet.com\/analysis\/the-feds-crossroads-hawkish-or-dovish-202301251827<\/a><\/a><\/p>\n

1. <\/span>“The Fed and the Markets Disagree on Wages and Inflation. That\u2019s a Problem.” Barron’s, 20 Jan. 2023, https:\/\/www.barrons.com\/articles\/federal-reserve-markets-wages-inflation-51674238963<\/a><\/a><\/p>\n

2. <\/span>“Markets To Fed: We’re Easing Whether You Like It Or Not” Forbes, 21 Jan. 2023, https:\/\/www.forbes.com\/sites\/greatspeculations\/2023\/01\/21\/markets-to-fed-were-easing-whether-you-like-it-or-not<\/a><\/a><\/p>\n

3. <\/span>“The Week Ahead: Fed, BoE, ECB interest rate decisions; Shell, BT, US tech results” CMC Markets, 27 Jan. 2023, https:\/\/www.cmcmarkets.com\/en-ie\/news-and-analysis\/the-week-ahead-fed-boe-ecb-interest-rate-decisions-shell-bt-us-tech-results<\/a><\/a><\/p>\n

4. <\/span>“The Fed’s Crossroads – Hawkish Or Dovish? | MENAFN.COM” MENAFN.COM, 26 Jan. 2023, https:\/\/menafn.com\/1105478676\/The-Feds-Crossroads-Hawkish-Or-Dovish<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/188"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=188"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/188\/revisions"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=188"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=188"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=188"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}