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USAGOLD/Peter Grant/05-11-17
Gold edged higher within the recent range as dollar gains faltered and stocks came under pressure. The yellow metal is pressuring Tuesday’s high at 1228.59; a breach of which would be an initial indication that a corrective low may be in place.
Stocks are under pressure today, led by the retail sector after Macy’s missed massively on earnings and sales. This is just the latest nail in the coffin of brick-and-mortar retail. According to The Wall Street Journal, “Shares of Macy’s, Kohl’s, J.C. Penney and Nordstrom are all down over the past three, five and 10 years.”
But that’s just the tip of the iceberg; we Americans have more retail commercial space per capita than anyone…by a wide margin. I fear there is a commercial real estate crisis of epic proportions in our future. This is a conversation that Jonathan and I had earlier in the week. That video should be posted tomorrow.
I’d categorize such a crisis as a black swan, but everyone has to know it’s coming…right? Gold is going to look increasingly attractive as a safe-haven as this day of reckoning gets closer.
U.S. PPI jumped 0.5% in April, bringing the annualized pace of producer inflation to 2.5%, up from 2.3% in March. Core PPI also rose to 1.9% y/y, versus 1.6% in March.
Tomorrow we’ll get a look at consumer inflation when April CPI comes out at 8:30AM ET. Expectations are for +0.2% m/m, although arguably there is now some upside risk.
If inflation is indeed picking-up once again, gold could catch a bid. The yellow metal is the classic hedge against inflation.
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