.75% rate hike probability rises with commodity bounce, inflation indicators go the other way

FOMC, inflation, commodities & gold

Even as inflation expectations roll over from the 2022 high…

…the CRB index continues to bounce. Here’s DBC for an up to the minute view. This is of course driven by OPEC and its ‘+’ members conniving to manipulate the price of oil, one of the prime drivers of CRB/DBC.

And CME Group has upped the .75% rate hike probability to nearly 73% for the upcoming November 2nd FOMC meeting.

Considering that we have also shown inflation expectations to be well correlated with commodities, I’d like to know who is wrong here because if the CRB index does not turn down soon I am going to be wrong to be short it. Per the DBC chart above, it has bounced as would normally be expected with a moving average ‘death cross’ in play. That’s the obligatory move in the direction opposite to the implication of the cross (which is of course TA mumbo jumbo in the short-term)

But as a holder of DBC short, I want to see DBC realize it’s going the wrong way and catch up to inflation expectations on the downside.

Also, gold stock bulls should want the same thing. Or something related to it like gold’s out-performance to inflation trades and indeed, inflation expectations. Here by the way, is Gold/RINF (GLD/RINF) per NFTRH’s subscriber indicator reference page. The burst above the daily SMA 50 was a start.

Gold bugs who want to invest for the right reasons don’t want to see this chart fail.

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This Post Has 2 Comments

  1. JV

    Hi Gary,
    “DBC up driven by OPEC and his “+” members conniving to manipulate the price of oil”

    If I am not mistaken OPEC’s decission came after the conniving EU/USA plans/decission to put a price cap on russian oil.

    1. Gary

      I don’t dispute the rising tensions between OPEC+ and other countries and the west. But OPEC has been doing this for decades. Trying to manip oil. I don’t think it will work.

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