Inflation Cycle – Commodities Lead Inflation Number

2023年7月24日

The last 50 years, we have seen gold, commodities, and inflation numbers move in cycles and in tandem together.

Though gold has picked up in recent years, make no mistake, the cycle between them is still intact.

If gold is leading the way, the rest should catch up subsequently.

Gold will likely remain high because of the easy money policy over the decades or the creation of off-balance debt.

Based on past cycle performance, commodities may come into alignment with gold, meaning there is a chance for commodities to catch up with gold.

When that happens, inflation will pick up again.

The inflation data to be reflected, such as the CPI or PCE, is usually a few months behind the commodity prices.

Therefore, the Fed has been in defense mode, combating inflation due to the weakness of the dollar, elevation of gold and firmness in commodities.

Some reference for traders:

Chicago SRW Wheat Futures & Options – Its Minimum Fluctuation
1/4 of one cent (0.0025) per bushel = $12.50 / ZW

Gold Futures & Options – Its Minimum Fluctuation
0.10 per troy ounce = $10.00 / GC

Soybean Oil Futures & Options - Its Minimum Fluctuation
1/100 of one cent (0.0001) per pound = $6.00 / ZL

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