US Taper & Inflation Gold ($1850) - Weekly News Highlights

Introduction

Happy Friday! We hope that our viewers are keeping well and safe. Today's news article highlights the current US situation and its implications on investments, Covid & Gold.

US TAPER

A week after the US Federal Reserve's decision to begin "Tapering", US Consumer Price Index saw a 6.2% increase in October. The rapid pace was the fastest since the 1990s.
Fed Chair Jerome Powell has indicated that the current level of inflation is inconsistent with its price stability goals. Bloomberg Opinion Columnist Conor Sen has commented that the Fed and Biden have gotten inflation estimations wrong for the year. The price growth has outlasted the majority of assessments.
The market would expect a response from the FED to control inflation. However, Powell has indicated that the central bank will not increase interest rates while buying bonds.
Many believe that the only option that the FED can take is to speed up the reduction of its asset purchases. The implication of speeding up the process would permit the Fed to reach a comfortable level to begin increasing interest rates to combat price pressures.
The market would feel that the Fed board would need to address their errors in forecasting inflation figures and their ability to contain them.
The market is concerned about a Taper Tantrum, similar to the 2013 situation that saw Treasury yields rise to an unprecedented level. Bloomberg reports that the US treasury market is already showing a tantrum with two-year yields nine basis points higher after the consumer price index report. The five-year yields rose by ten basis points.

COVID

US Covid-19 cases of the recent delta strain have declined by 57%. The average number of cases has dropped from 172,500 to 74,000.
Progression in treatments and vaccinations will aid the US in transitioning from a 'pandemic' to an 'endemic'. The result of the transition would make the virus more manageable.
Pharmaceuticals Merck and Pfizer have introduced antiviral Covid pills that help reduce the risk of hospitalisations and death by 89% in higher-risk adults. Dr Scott Gottlieb, a Pfizer board member, has indicated that antiviral medications also offer more excellent protection for individuals at risk for severe Covid complications.
Pfizer has pushed health regulators in the US to authorise booster jabs its Covid 19 vaccine in individuals above 18. The request comes amid concerns that infections could rise during the holiday season and colder weather that brings more people indoors for large gatherings.
President Biden has mandated that businesses with more at least 100 employees are required to ensure their personnel is fully immunised against Covid by January 4th. Employees that are unwilling to be vaccinated will have to wear a mask and get tested regularly.
The latest CDC figures indicate that only 70% of US adults are fully vaccinated, with only 21.5mil booster doses administered. The Pfizer booster study has suggested that the booster jabs can restore protection against symptomatic infections to near 96%
The US has permitted Pfizer to begin vaccinating children between the ages of 5 and 11.

GOLD

Spot gold prices have spiked to $1850/ounce in response to the latest US Consumer Price Inflation report.
Spot prices rose by 1.7% from their earlier session of $1823.
Over the summer months, the spot prices have not been able to break the range of the $1835 level. However, due to the market's concerns about inflation, many have flocked towards gold.