Top Stories This Week: Gold Price Dips, Bitcoin Tops US$50,000, Graphite Miner Signs Deals (2024)

The gold price dipped below the US$2,000 per ounce mark this week for the first time in 2024, falling by about US$40 on Tuesday (February 13). It had recovered by Friday (February 16) to close just over US$2,020.

The decline came as the US Bureau of Labor Statistics released stronger-than-expected inflation data — the numbers show that the consumer price index (CPI) rose 0.3 percent month-on-month in January, and 3.1 percent year-on-year.

That's higher than the rises of 0.2 percent month-on-month and 2.9 percent year-on-year predicted by analysts polled by Reuters. Core CPI, which excludes food and energy, was up 3.9 percent year-on-year in January, the same as December.

Market participants are watching inflation closely to try to gauge when the US Federal Reserve will start lowering interest rates. Its next meeting is scheduled to run from March 19 to 20, and thus far Chair Jerome Powell has emphasized that the central bank will need assurance that inflation is trending sustainably downward before it cuts.

Gold has performed well in the high-rate environment seen for the last couple of years, but many of the experts the Investing News Network has spoken to believe it will see a true breakout when the Fed starts to take rates back down. If that happens, gold equities, which so far have underperformed compared to the metal, are likely to follow.

Here's how Rob McEwen of McEwen Mining (TSX:MUX,NYSE:MUX) put it in a recent interview:

"To me this is the time to be buying, particularly in the junior space. There's some good drill results coming out and the values are just dragging along the floor. It seems like everybody's forgotten that junior stocks can have really big runs. And we're in a cyclical business, it's not all straight-line up. For me, I find this is the time to be buying, and I have been buying juniors and adding to positions."

That's not to say gold is without headwinds. With Bitcoin crossing the US$50,000 mark for the first time since 2021 this week, there's been some discussion of whether the cryptocurrency is stealing attention from the yellow metal.

Bitcoin's price rise has been connected to the launch of spot Bitcoin exchange-traded funds in the US. The first of these vehicles were approved in January, and were widely expected to draw new investors into the space. Bitcoin enthusiasts are also looking ahead to the next halving event in April as another catalyst.

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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.