After the surprise CPI data from the US last week there are growing concerns about rising inflation. These fears increased with the University of Michigan consumer sentiment print on Friday. The US University of Michigan May prelim consumer sentiment was a big miss at 82.8 vs 90.0 expected. The 1 year inflation expectations rose to 4.6% vs 3.5% expected. The rise in CPI will trouble the Federal Reserve. In simple terms when prices rise cash has less value. The more inflation rises, the more prices rise, the less value cash has. One solution for investors may be to buy gold. However, as soon as the Fed announce bond tapering then gold will fall.

Is now the perfect time to buy gold?

Key Trade Risks: If the Federal Reserve announce bond tapering then gold prices should fall.