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Gold down as Senior ETF analyst sees ‘nowhere to hide’

By:
on Oct 13, 2022
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  • Senior ETF analyst Eric Balchunas comments on markets reaction to latest US inflation data.
  • The hot CPI readings saw most asset classes bleed, including stocks, treasury ETFs and gold.
  • Gold prices were down nearly 1.5% on the day, dropping as the dollar ticked up.

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The latest market news is dominated by today’s investor reaction to the inflation readings out of the United States. The hot CPI data saw asset classes bleed, including stocks, bond ETFs and gold.

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Eric Balchunas, a senior ETF analyst at Bloomberg, has warned that with the broader market going down together, there’s nowhere for investors to hide.

The analyst’s comments follow today’s US inflation data that had the September readings for the consumer price index (CPI) printing at a 40-year high dating back to 1982.

Gold down by over 1% as markets dump on CPI data

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There were sharp losses all across the markets, not just risk assets – as gold prices fell by nearly 1.5% to mirror declines across equities, long term bond ETFs and crypto.

As we reported this morning, stocks erased gains made during the futures trading hours in the lead up to the CPI release.

Balchunas highlighted the scenario that had charts for the S&P 500 and Gold both down by more than 1% as “rare” and an indicator that there is “nowhere to hide.”

Commenting further on the day’s market outlook amid reaction from investors, Balchunas added:

“I keep thinking about those days of the ‘everything rally’ where everything went up together. Now, the opposite. To quote Goodfellas, “This is the bad time.””

Gold remains perched near its 200-week moving average near $1,652.90 per ounce and an uptick for the greenback after today’s news could add to recent pressure. Its likely further pressure for the precious metal is a given if the dollar strengthens, which would push gold prices more than 3% in the red over the past month.

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