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The Bureau of Labor Statistics releases an inflation report every month. This report gives economists, investors and consumers an idea of how fast prices are growing in the United States. And, the state of price growth in the United States can impact financial markets. The precious metals market may also react to the next inflation report. And, that means the report can cause the price of gold to move.
The next inflation report will be released on July 11, 2024. This month’s report will show June’s inflation rate. And, this is a crucial report to watch. Inflation had cooled in April and May. Continued cooling of price growth could lead to a Federal Reserve rate cut.
But, regardless of whether inflation continues cooling or starts to pick back up, it may be a good idea to buy gold before the report comes out. Below, we’ll explain why you may want to act now.
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Why you should invest in gold before the July inflation report’s released
The next inflation report is a critical one. It will give the Federal Reserve the information it needs to make the next interest rate decision. And, the inflation report could be good for gold. Here are a few reasons to buy gold before the report is released.
The inflation report could cause gold’s price to rise
“Gold has been touted to be a solid hedge against inflation,” explains Mark Charnet, founder and CEO of the financial planning firm, American Prosperity Group. So, if June’s inflation rate ticks up from May, it could cause investors to buy more gold. And, that demand increase could result in higher gold prices.
But, there’s a strong argument that gold could see gains even if inflation continues cooling.
As inflation cools, the likelihood of a rate cut grows. And, if a rate cut happens, rates on bonds, deposit accounts and other interest-based safe havens could fall – making them less attractive to investors. If that happens, gold demand could rise as investors look for ways to improve their safe haven allocations.
Prepare for the upcoming inflation report by adding gold to your portfolio today.
Gold’s price is down from its May 20 high
Gold’s price has seen impressive growth this year. But, that growth peaked on May 20, 2024, when the commodity’s price climbed to $2,439.98 per ounce. However, the price of gold has since cooled. The commodity is trading at just $2,326.02 per ounce today.
That’s more than $100 cheaper per ounce than just over a month ago. And, today’s price is more than 4% lower than the May 20, 2024 high.
That could be good news if you want to add gold to your portfolio. After all, when you do, you’ll do so at a discount to gold’s most recent high price.
Gold can protect your portfolio from inflation
The value of gold as an inflation hedge will be clear if the June inflation report shows growth over May’s 3.3% inflation rate. But, even if inflation cools, it’s typically a good idea to consider investing in gold as a hedge against growing prices.
After all, inflation doesn’t usually move in a straight line. Instead, it follows cycles of upward and downward movement. So, once inflation finds its bottom, you can expect it to heat up again. And when it does, it will be a good idea to have gold in your portfolio to hedge against inflationary pressures.
The bottom line
The next inflation report is scheduled for release on July 11, 2024. And, it could support growth in gold’s price. But, that’s not the only reason you should add gold to your portfolio before the report is released. With gold’s price offering a discount to recent highs and inflation being cyclical, it’s a good idea to add the commodity to your portfolio now. Compare your options among leading gold dealers today.