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Rising Gas Prices Contribute to Inflation, ECB Announcement & Gold Prices Move Back Above $2,000

U.S. indices lower, as inflation rises AGAIN!

Indices in the United States were lower on Thursday, as data showed that consumer prices had once again risen.

Figures from the Labor Department showed that its consumer price index had risen by 0.8% in February, following a gain of 0.6% the month prior.


source: tradingeconomics.com

Following a 0.8% decline in gasoline prices in January, last month saw a 6.6% increase, which was the main factor to the rise in CPI.

CPI is now up 7.9% on an annualised basis, which is the biggest year-on-year gain in consumer prices since 1982.

At the close, the NASDAQ was 0.95% lower, with the S&P 500 falling 0.43%.

ECB announces end to bond buying programme

On Thursday, the ECB announced that it would be winding down its asset purchasing programme as market conditions continue to change.

In a statement following the announcement, the bank said that “the Governing Council will conclude net purchases under the APP in the third quarter,”

💡 Where are inflation levels at
Last month, the annual inflation rate in the eurozone rose to 5.8 percent, up from 5.1 percent the previous month. On Thursday, the central bank raised its projections for inflation for the next three years, predicting that annual inflation for 2022 would be 5.1 percent, nearly double the forecast of 2.6 percent three months ago. Inflation is forecast to be 2.1 percent in 2023, just above the central bank’s target, and 1.9 percent in 2024.

The bank’s President Christine Lagarde who has been reluctant to hike rates, however, took the action to alter QE as a result of the war in Ukraine.

She stated, “The Russia-Ukraine war will have a material impact on economic activity and inflation through higher energy and commodity prices, the disruption of international commerce and weaker confidence”.

Germany’s DAX 30 closed 2.93% lower on the news.

Gold moves back above $2,000, as Russia/Ukraine peace talks fail

Gold prices continued to hover around the $2,000 level on Thursday, as peace talks between Russia and Ukraine reportedly failed.

Talks between the two nations have been ongoing in recent days, prior to the airstrike on a Ukrainian maternity unit, which the Russian’s denied.

Speaking today, Ukraine Foreign Minister Dmytro Kuleb stated that, “Unfortunately, I can confirm that the Russian leadership, including Minister Lavrov, live in their own reality”

He added that, “In our talks, behind closed doors and in the absence of the media, he told me looking in my eyes that the pictures of pregnant women being taken from under the rubble of the maternity house are fake, that they hit the maternity house as a military target because the Russian military was absolutely sure that it was under the control of Ukrainian army”.

After falling by almost $70 yesterday, to a low of $1,975, XAUUSD is now trading at $1,997 with Comex Gold at $2,001.

“I have found that when the market’s going down, and you buy funds wisely, at some point in the future, you will be happy. You won’t get there by reading. Now is the time to buy.”

–Peter Lynch.

Eliman Dambell

Senior Market Analyst