Ahead of the Consumer Price Index report on Wednesday, gold prices are rising. Investors who bought Barrick Gold (GOLD) should expect the stock to trade at new highs next.
In its Q2 report, the firm earned $0.21 a share. CEO Mark Bristow said that it is open to acquisition opportunities in Canada. For example, it is ready to be a partner in the Cobre Panama copper mine.
Oil is generally falling but managed to rally recently. Tensions in the Middle East continue to push investors to oil stocks. Investors may consider Exxon Mobil (XOM), which is close to its 52-week high.
On Wednesday, the key CPI report will set the market’s direction for the rest of the month. Earlier in the month, the U.S. government reported a weak job report, heightening fears of a recession. Given the market’s increased volatility (VXX), markets will react to the CPI report either way. If the report shows that inflation is persistent, it would cause investors to dump interest rate-sensitive stocks. That includes banks and utilities.
If inflation falls by too much, markets may set higher expectations that the Fed will cut rates before its September meeting. Although this is unlikely, heightened expectations for rate cuts would only happen if market liquidity were to dry up.
Continue watching the bond market by holding IEF and TLT ETFs. They will rise if markets expect lower interest rates on the way.
