The consumer price index (CPI) report published on the morning of February 13 brought higher inflation figures than was previously expected – 3.1% vs 2.9%. One of the first assets to react to the news was gold.
In the minutes following the publication, the commodity entered into a sharp decline, falling as much as 1.42% by the time of publication. The change saw the price of gold drop below $2,000 for the first time since December 13, 2023.
Investor, broker, financial commentator, radio personality, and gold bug, Peter Schiff, quickly took to X to comment that while the hotter-than-expected CPI caused gold to drop, it actually constitutes a bullish event for the commodity “as it confirms that the Fed wasn’t able to raise interest rates high enough to stop inflation from running out of control.”
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Ten days earlier, gold also saw itself on a sudden decline as the ‘nonfarm payroll’ – jobs – report came in showing a significantly greater job growth than was expected. Immediately following the release, the precious metal started dropping and erased the gains from its previous 4-day rally.
CPI causes across-the-board drop
Gold wasn’t the only asset to drop upon the release of CPI figures for January – in fact, the market’s opening on Tuesday saw a significant across-the-board drop. Silver, another precious metal, likewise started falling and, by press time, dropped 2.72% to $22.04 per ounce.
Bitcoin (BTC) – commonly regarded as gold’s digital counterpart – itself entered a sharp decline on the morning of February 13 and, after a staggering 1-day rise above $50,000 on Monday, fell 2.63% to $48,622.
U.S. stocks were also not spared the shock as the two major stock indices – S&P 500 and Nasdaq 100 – started the day in the red. At press time, the former lost its recently attained record level of 5,000 and is down 1.34%, and the latter dropped 1.43%.
It is noteworthy, however, that unlike gold, silver, Bitcoin, and the S&P 500, the Nasdaq 100 opened significantly below its latest close but has been on an overall upward trajectory in the first hour of trading.
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