Predicting Gold’s Price Movement following This Week’s Inflation Report

Gold has served as a currency and a safe way to invest and protect your money for centuries. Thanks to its scarcity and consistently strong demand, gold is unique in its ability to withstand economic shocks while maintaining and often growing in price. This has been particularly evident in recent years. With inflation hitting its highest level in decades in June 2022 and interest rates designed to lower it at their highest level since 2001, many investors have turned to gold for the protection the yellow metal can provide.

Gold investing hit an 11-year high last September and the price of the precious metal has surged so far in 2024, rising from $2,063.73 per ounce on January 1 to $2,347.71 on May 13 — or around 14% in just over four months. But with a new inflation report scheduled to be released on May 15, many investors are wondering where the price of gold could be headed this week. Below, we’ll break down what to expect.

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Will gold’s price rise after this week’s inflation report?

To better understand the prospect for a gold price uptick this week, it helps to look at what’s happened to the price of the precious metal following the release of this year’s first few inflation reports:

• January 2024: The first inflation report of the year was released on January 11, showing inflation numbers for December 2023. The rate rose from 3.1% in November to 3.4% in December. According to gold dealer American Hartford Gold, the price of the metal rose from $2,035.10 on January 11 to $2,048.99 on January 12 (around a 0.60% increase).
• February 2024: The inflation report released February 13 showed inflation running hotter than anticipated in January, but it was at a 3.1% pace, lower than December’s 3.4%. Gold’s price then went from $1,991.45 on February 13 to $1,993.87 on February 14 (a 0.12% rise).
• March 2024: The inflation report released March 12 showed the rate increasing from January’s 3.1% to 3.2% in February. By this point, gold had increased to $2,157.04 per ounce on March 12 and it ticked up further to $2,175.55 on March 13 (0.85% higher).
• April 2024: The inflation report released on April 10 showed the rate increasing significantly in March from 3.2% to 3.5%. The price of gold rose from $2,335.60 on April 10 to $2,376.89 on April 11 (just under 2% higher).

So, as the first few months of the year have demonstrated, not only is the price of gold increasing, it has grown both month over month and in the amount it rises following each inflation report release (just 0.60% after the January report but just under 2% following the April release). If this trend continues, then, investors should expect gold to increase again this week, making now an opportune time to invest before the cost rises. That said, multiple factors can affect the price of gold, not least of which is a potential drop in the inflation rate. But if recent history is any indication, early this week could be a good time to get invested.

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The bottom line

Predicting the price of any asset is difficult (if not impossible) to do. But recent performance can go a long way toward dictating future prices. And gold’s price has consistently risen after the first few inflation reports were released this year. That noted, the major price increases have taken place over longer periods and not just in the 24 hours following a report release. But if you’re looking for a smart and safe place to invest your money now, and you want to do so before any price increases make the investment prohibitive, this could be a great time to invest in gold. Just make sure to stay within the 10% investment threshold most experts recommend to allow the other assets in your portfolio the flexibility to grow as needed.