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The significant economic report for this week was this morning’s release of the Personal Consumption Expenditures Price Index (PCE) for July which is the FED’s favorite inflation gauge.
Inflation increased .2% from the June reading and increased 2.5% from a year ago both in line with analyst’s expectations.
Excluding the more volatile food and energy components core PCE increased .2% from last month and up 2.6% from a year ago which was a .1% improvement. In my opinion, these numbers continue to be above the FED’s 2% inflation target and the thought that the FED is now going to cut interest rates is being looked at for the wrong reason. I believe the FED is looking to cut interest rates at their September meeting because we are heading into a recession. And is an election year…………
Gold and silver both declined this morning in a buy the rumor sell the news follow on. As of this writing gold is down $14.50 an ounce or .56% and silver is down .51 cents an ounce or 1.71%. The gold to silver ratio is at 86.37% above the 80-85 buy indication. Gold continues to be above the 50-day and 200-day moving averages and silver, which at the beginning of August was between the 50-day and 200-day moving averages, has increased to where it is now above the 200-day moving average and trading around the 50-day moving average.
Buy the dip!
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