When the Federal Reserve releases its quarterly Statement of Economic Projections (E.P.) the latest Gold Price to Watch Index will be released and it is scheduled to reach its June peak by this August.
This is one indication that the economic data coming out of Washington D.C. has helped push the Gold Price to new highs. The Fed’s Q.E.M. which is an economic projection for the second half of this year is predicting that it will have the ability to raise rates back to 2 percent before the end of the year.
The Q.E.M. also suggests that the Federal Reserve will be able to maintain its unemployment rate at 7 percent or above. The unemployment rate is projected to increase slightly to a six month high during the third quarter of this year. The unemployment rate has been on a steady decline since April 2020 when the economic recession started.
The economic data coming out of Washington has also indicated that the stock market is on the verge of experiencing a significant rise. Although it is not clear whether the Federal Reserve will raise interest rates to stop stock market losses, it is expected to raise rates to a two-month high, which may have some significant effect on the Dow. If the economy does not rebound, the Dow may lose even more ground to the S&P 500.
The latest quarterly statement from the Federal Reserve also indicates that the Federal Reserve will be able to maintain its inflation target as well as maintaining its target for unemployment. Many analysts believe that the unemployment rate is likely to drop below five percent in the second half of this year, which could further assist the Federal Reserve in reducing its balance sheet.
There is little doubt that the current level of consumer spending has been impacted by recent economic news. Even though some analysts believe that the Federal Reserve will continue to do whatever it can to maintain its jobless rate at or above seven percent, it is likely to continue to lower interest rates and purchase more bonds to stimulate the economy and maintain the current level of consumer spending.
It is likely that the Gold Price will remain stable as long as there is no increase in the unemployment rate of inflation. and there is no increase in the price of oil or gas.
When the Q.E.M. is released next quarter, investors can expect a significant increase in the Gold Price to Watch Index which will also help investors determine whether the economy is performing as they had hoped. and whether the Federal Reserve has successfully maintained its jobless rate or not.
As inflation rises, the dollar value of U.S. Dollar is expected to depreciate. In order to prevent depreciation of the U.S. Dollar, the Federal Reserve will have to continue to lower interest rates and reduce the level of borrowing it makes.
The Federal Reserve has been successful in keeping its inflation target and maintaining the unemployment rate low. and is also preventing the stock market from experiencing a decline. However, if the Federal Reserve continues to hold its inflation target and maintains the unemployment rate at the level of six percent, the inflationary pressures on the economy is only going to increase.
With inflationary pressures are increasing and the Federal Reserve holds its inflationary pressures high, the price of Gold is expected to continue to increase. As the price of Gold rises, investors will see that there are higher costs for their Gold and as the gold price moves up.
The increased price of Gold will provide investors with an opportunity to buy more Gold at a lower cost and the Federal Reserve will be forced to tighten its inflationary pressures on the economy. If the inflationary pressures of the Federal Reserve increases, the Gold Price is likely to increase at a faster pace than before because the Federal Reserve will not be able to hold its inflationary pressures when the inflationary pressures of the Federal Reserve decreases.