TODAY'S CPI IS MISSING ITS BIGGEST NUMBER 🚨 (What It Means for Gold)

[00:00:00] Speaker 1: In a few hours, the most important inflation report of the year for gold will be released. And for the first time in this entire cycle, its biggest number will not exist. There will be no year-over-year inflation rate. No annual headline, no annual core. And the market that moves gold by $100 in a few hours is about to trade on a number that is smaller, noisier, and easier to misread than anyone is admitting. Here is why this matters. This is the last major inflation report before the Federal Reserve decides on a December rate hike. One analysis put it in a single line. The difference between a core reading of 0.2% and 0.3% is the difference between December being the last hike and December not being the last hike. And I am going to show you how a difference of 100th of a percentage point can flip the headline. So here's the plan. First, I will show you why the number is missing and what the market will use instead. Second, I will show you exactly what happened to gold the last time the report came out hot. Third, I will show you what the forecasters expect and the rounding trap hiding inside those forecasts. Fourth, I will show you the scenarios, the levels, and what each outcome means for gold and silver. And fifth, I will show you the part the report cannot tell you. Stay with me, because the rounding trap is the part that changes how you will read the number at 830 this morning. First, why is a number missing? Every month, the Bureau of Labor Statistics compares today's price index with the same month a year ago. That gives you the annual inflation rate, the number that makes the headlines. But last October, during the federal government shutdown, the Bureau never collected October prices. So there is no October 2025 index to compare with. That means October 2026 will be published without a year-over-year figure, for the headline and for core. That sounds technical, but think about what it removes. For months, every headline, every chart, and every Fed speech has pointed to the same annual figure. September's was 3.7%. The market had been expecting about 3.9% for October. Now that anchor is gone, and the monthly change becomes the whole story. The monthly consensus is clear. Economists expect headline prices to rise 0.3% in October, and core prices, which strip out food and energy, to rise 0.2%. That would be a cooling from September, when headline rose 0.6% and core rose 0.3%. If you are new to this, here is the quick version. The Consumer Price Index, or CPI, tracks the prices of a basket of things households buy. The headline number includes everything. The core number removes food and energy, because those swing a lot. The Fed pays more attention to core, because it shows the underlying trend. Now let's look at what happened the last time. On October 14th, the September report came out. Headline CPI rose 0.6%, the biggest gain in five months. The annual rate was 3.7% against 3.6% expected. Core rose 0.3%, when economists expected 0.2%, and the annual core rate rose to 2.6%. A surge in gasoline, up 9.1% in a month, accounted for more than half of the headline increase. And gold? Gold fell about 1.8% to around $4,080. One widely followed account noted that spot gold was down nearly $100 within hours, and it hit its lowest level since early August. The next day, producer prices came in even hotter, with the headline index up 1.3% on the month, and core wholesale prices up 0.7%. Notice something strange. Inflation went up, and gold went down. Isn't gold supposed to protect you from inflation? In theory, yes. But in 2026, gold has been trading as a rate trade. A hot inflation report raises the odds of a Fed hike, a hike raises treasury yields and the dollar, and that pushes gold down. That is how a hot report cost gold $100. But history in this cycle also shows that the reaction is not automatic. In August, core CPI came in hotter than forecast, and gold barely reacted, because it had already dropped nearly 2% the day before on a soft producer price report. The market had already moved. In September, there was no such cushion. So the lesson is that the reaction depends on what is already priced. Let's talk about what is priced right now. Futures markets see about a 77% to 81% chance of a quarter-point Fed rate hike in December, depending on the source. One summary of the Fed funds, futures, shows that the odds of a December hike went from about 63% on Thursday, the day the stock market crashed, to about 75% on Friday, after the strong jobs report. So the path has been moving a lot, and today's number is the first inflation reading against that new path. Fed officials Michelle Bowman and Austin Goolsbee were scheduled to speak on Monday, and Christopher Waller is expected to speak later this week, so the market will get fresh commentary right after the number. That is why the reaction may not be a single move. Meanwhile, Fed officials have been sending a hawkish message. Two of them, Beth Hammack and Thomas Barkin, argued last week for a gradual path of hikes, and other officials are speaking this week. The 10-year Treasury yield sits around 4.86%, and gold has been going up anyway. On Monday, spot gold rose 1.6% to about $430, even with hike odds near 80%, helped by cheaper oil and a weaker dollar. That is the setting. Gold is up about 6-7% from its October low, hovering just above the 4100 area, a pivot that sits near a short-term downtrend line. The one-year low near 3,270 is still on the chart, and one report will help decide which way gold breaks from here. Now, the forecasts and the rounding trap. Look at how close together the forecasts are. The Cleveland Feds, now cast for October headline CPI, is 0.24%. FactSet's estimate is about 0.24%. Some banks sees 0.29%. The Bloomberg survey median is about 0.3%. One analyst noted that headline inflation is particularly close to the threshold separating a reported 0.2 from a reported 0.3. Here is why that matters. The Bureau of Labor statistics rounds to one decimal place. A reading of 0.24% is reported as 0.2. A reading of 0.25% is reported as 0.3. That is a difference of one-hundredth of a percentage point. And the headline you read in the news flips: "Gold traders will react to the rounded number, not to the unrounded one. That is the rounding trap." The same is true for Core. The consensus is 0.2%. The Cleveland Fed now cast is 0.21. Wells Fargo expects 0.21. Natixis expects about 0.22. Credit Agricole expects 0.26. If Core prints at 0.24, it will say 0.2 and look benign. If it prints at 0.26, it will say 0.3 and look hot. The raw difference is two-hundredths of a point. The market reaction could be hundreds of dollars on gold. And there is a second layer. If Core prints at 0.2%, the number would be in line with expectations. But it would also be the softest reading in a while after September's upside surprise. A cooler energy print could pull the headline down too. Analysts expect the slowdown to come largely from softer energy prices, with oil falling sharply in recent days. Core goods. Inflation is also expected to cool as the September jump in categories such as apparel and toys fades. To see why energy matters, remember last month. Gasoline jumped 9.1% in September, and the energy index rose 5.2%, which is why headline CPI ran so hot. This month, oil fell, so the headline is expected to cool even if the Core is stubborn. But even a good number may not stop the Fed. Natixis said an inline report would be encouraging for a newly hawkish Fed. But inflation would still be significantly above the 2% goal, and the firm thinks another hike will be warranted in December. Wells Fargo also said a softer Core print would leave 2026 as a year of limited progress toward the 2% goal and still support a December hike. So what does this mean for gold? It means there are two ways to lose, and two ways to win. Gold could lose on a hot number. It could also lose if a cool number is not cool enough to change the Fed's mind. And it could win on a cool number if the market decides that December really is the last hike. Now, let's build the scenarios. Think of these as maps, not predictions. Scenario one: a cool report. Core at 0.2% or lower, headline at or below 0.3. One analyst's map says that December hike odds could fall below 70%. The dollar index could test around 101.2. Treasury yields could slip, and gold could push toward the 497 to 4,002 area. That would be a decisive move away from the 4,100 pivot. Scenario two: a warm report. Core at 0.3%. The same analysis says that this would lock in a December hike, the dollar would hold near 102, and gold could slip back toward 4,000. Below that, the next area traders watch is around 3,870. The one-year low from October 30th, and a break of that level would put the round number zone near 3,800 in play. Scenario three: a hot report. Headline at 0.4% or more, with Core at 0.3. That would shift the debate from whether December is the last hike to whether there will be more. The 10-year yield could move back above 4.95%, and gold would likely test its lower supports. Scenario four: a mixed report. Core cool, but headline high because of food and shelter. In that case, expect a messy day. A sharp first move, then a reversal as traders read the details. Remember the details. After the headline, traders look at three things. First, shelter costs, which analysts expect to show a delayed pass-through. Second, services excluding housing, which tell you whether wage pressure is spilling into prices. And third, airfares, used cars, and apparel, categories that surprise last month. Let me also remind you what the Fed is looking at. Jobs are strong. The October report showed 165,000 jobs and unemployment at 4.1%. The economy grew 3.4% in the third quarter. The Fed's preferred inflation gauge, PCE, ran at 3.6% in September. So the bar for the Fed to stop is not just a soft CPI. It is a series of soft numbers. That is why this CPI is so important, but also why it cannot settle everything. It is the last major CPI before the December meeting, but it is not the last data point. The Fed will still see the PPI on Friday, the October PCE report on November 25th, the November jobs report on December 4th, and the minutes of its October meeting on November 18th. Remember, CPI is only one of two inflation reports this week. Producer prices arrive on Friday, November 13th, with consensus at a 0.3% monthly rise. Last month, the producer price report was the second shoe to drop, with the headline index up 1.3%. So even after CPI, the story may not be finished. And for the longer-term view, banks have been cutting their gold targets. Goldman Sachs trimmed its year-end forecast to $4,150, from $4,750, according to Reuters. That tells you that even the optimists see gold roughly where it trades today, and that the next leg depends on the Fed. Now, let me show you the levels for gold. Spot gold closed Monday near $4,130, and the December futures contract near $4,139. The $4,100 area is now key. Below it, support starts around $4,025, and then the one-year low near $3,070. Above, resistance around $4,200, with one analyst's cool report target at $4,197 to $4,200. For silver, the first resistance sits near $53, with $54,50 above. Support is at $51, and then the $50 line, then the double bottom near $48.60. Silver often moves more than gold on days like this, so a cool CPI could send it sharply higher, and a hot one could send it sharply lower. Let me give you a simple way to read the number in real time. When the report hits at 8:30 AM Eastern, which is 1:30 PM in London, look at four things in this order: 1. Core, month-over-month, rounded; 2. Headline month-over-month, rounded; 3. The 10-year treasury yield and the dollar index in the first few minutes; and 4. The probability of a December hike on the CME FedWatch tool. If the hike odds are moving, gold will follow. And remember this: the first move is often not the last. Last month, gold did not fall by $100 in seconds. It fell over hours, as traders digested the details in the next day's producer price data. So do not judge the number by the first candle. There is also something this report cannot tell us. It cannot tell us how the Fed will react. The Fed has told us that it watches the full picture, and the full picture includes jobs, wages, expectations, and other inflation gauges. A cool CPI could reduce pressure for a hike. It cannot cancel the hike by itself, and it cannot tell us about the other forces in the gold market. Central banks bought a record 321 tons of gold in the third quarter, according to the World Gold Council. Oil has been falling on hopes of a U.S.-Iran deal. The dollar slid after the election. And stocks are in a correction. Gold has been moving on all of those forces at the same time. Here's something else worth watching. The missing year-over-year number may create confusion. Without an official annual figure, media outlets and traders may calculate their own versions, such as annualized three-month changes. Those numbers may not match, which means headlines may disagree about whether inflation is rising or falling. In that kind of confusion, markets often react to the headline and then reverse as the details settle. Here's a quick checklist you can keep on your screen. Number one, core, month-over-month, rounded. Number two, headline month-over-month, rounded. Number three, the 10-year treasury yield, around 4.86% before the release. Number four, the dollar index, around 102. And number five, the odds of a December hike, around 77 to 81%. If three of those five move in the same direction, gold will usually follow. So let me bring it together. This is a CPI with no annual number, forecasts that sit one hundredth of a point from a rounding flip, and a Fed that is deciding on a hike within weeks. Gold is sitting just above a key pivot, with hike odds near 80%. So here's the answer in one sentence. Today's inflation report will not tell you whether inflation is falling because the usual annual number is missing, but it will tell you whether the Fed's December hike is the last one or not. I don't know what the number will be, and anyone who tells you they know is guessing. What I can tell you is what the market is watching and which levels matter. Gold holding above 4100 keeps 4200 in view. Gold below 425 puts 370 back in play. Silver above 53 or below 51 would tell you which way this report leaned. Remember, this is not financial advice. It is an analysis of what the data shows and what analysts expect. Do your own research and think about your own risk. If you are following gold and silver through this, subscribe, because I will keep tracking it as it develops. And tell me in the comments. Do you think the core number prints at 0.2 or 0.3? I read every one. See you in the next one.