CPI Explosion: Markets Rattled!

CPI numbers were released this morning and came in at 9.1%. This is higher than all the consensus numbers estimated on Wall Street, with most projections in the 8.6-8.9% range. This speaks to the difficulties of precise forecasting in this environment, and the lack of experience in dealing with a stagflationary environment.

The initial reaction was lower across the board from stocks to metals, with an important caveat that massive buying in the gold futures market implies higher metals prices will be coming soon—more about that in the longer article being released tomorrow.

For now gold is down 2.9% for the week at $1,720, silver is down 1.9% to $19.15, platinum is down 3.3% to $855, and palladium is up 1.8% to $2,035.

From a year ago today, gold is down 4.8%, silver is 26% lower, platinum is off 23%, and palladium is down 28%.

Year to date, the precious metals complex continues to be the best performer so far in 2022, compared to stocks, bonds, and cryptocurrencies. Real wages are declining at a rate of -4.4% vs. inflation. The bottom for metals in 2022 is likely in.