Gold Rose, Then Settled Back Down, After Last Week’s Inflation Releases

Wall Street always likes to cite “reasons” for the rise or fall of stocks or gold without any history or context but that has become a fairly useless exercise. Why? Because the real motivation for most investors is that when they like or don’t like an investment, they use some surface “reason” (excuse) for buying or selling it … on any given day.

Last week, the Labor Department stated the Consumer Price Index (CPI) surged 0.9% in March and gained 3.3% over the past 12 months. The big culprit, of course, was the surge in energy prices after the military action in Iran began. Gasoline prices surged 18.9% in March and fuel oil prices soared 44.2%! However, the “core” CPI, excluding food and energy, rose only 0.2% in March and a total of 2.6% over the past 12 months. This gain was “in line” with the economists’ consensus estimate and the core CPI was even better than their projections, which called for a 0.3% rise in March. So ironically, the CPI report was positive.

Also, the Fed’s favorite inflation index, the Personal Consumption Expenditures (PCE) index, was released Thursday and showed a 0.4% rise in February and 2.8% rise over the past year. It’s important to note that this was for February, before the start of the conflict in Iran, so fuel prices were not a part of that report. The core PCE, excluding food and energy, also rose by 0.4% in February and was up 3.0% in the past 12 months.

In previous months, an increase in inflation rates would either send gold up or down, depending on the mood (or excuses) of the gold ETF traders. In late March, The Wall Street Journal reflected the mood of the market with this headline: “War and Inflation Are Supposed to Be Gold’s Friends – Not This Time” (by James Mackintosh, March 22, 2026). Last week, Wall Street was in a generally sour mood over gold while also having high hopes for sudden peace in Iran, so traders favored buying stocks once again but year-to-date, silver and gold are still up 9% and 10%, respectively, while stocks are at near-zero levels.

As I mentioned above, gold is up 10% so far this year and silver is up nearly 9%, while the major stock market indexes are slightly down. This may not be evident to most Wall Street cheerleaders since they point to the stock market’s “recovery” last week after a short-lived peace conference in Pakistan. However, the day-to-day news can mask the overall trend of gold and silver outpacing stocks by at least 2-to-1 during the 2020s, with silver outpacing the Dow index by 7-to-1 since the start of 2022 – just before Russia invaded Ukraine.