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Gold crashes below $2,000 but Peter Schiff thinks it’s ‘bullish’

Gold crashes below $2,000 but Peter Schiff thinks it's ‘bullish’

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.

Gold 1-day price chart. Source: TradingView

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.”

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 indicesS&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%.

Silver, BTC, S&P 500, and Nasdaq 100 1-day price charts. Source: TradingView and Google

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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