Money Loser: I’ve got real interest rates down. But I keep hearing traders say, “It’s not inflation itself—it’s inflation expectations that drive gold.” 

Money Maker: Ah, now you’re chasing the invisible thread. Inflation expectations are like whispers before a storm. They move the market before the data even drops. 

Money Loser: Teach me how to hear those whispers. 

Money Maker: Gladly. Welcome to the world of forward-looking fear and gold’s anticipation reflex. 

Money Maker: First, let’s define the terms: 

· Inflation: What’s already happened. Measured by CPI, PCE, etc. 

· Inflation Expectations: What people believe will happen in the future. 

Money Loser: So one’s fact, the other’s forecast? 

Money Maker: Exactly. And markets trade on the forecast, not the past. 

Money Maker: Gold is forward-looking. It reacts when investors expect purchasing power to erode. 

Money Loser: So if CPI is still low but people fear it’ll rise… 

Money Maker: Gold can rally before inflation shows up in the data. 

Money Maker: Key indicators include: 

Breakeven Inflation Rate: Difference between nominal bonds and TIPS 

Inflation Swap Rates 

University of Michigan Consumer Expectations 

Market surveys and forward curves 

Money Loser: Which one is best? 

Money Maker: Breakevens. Especially the 5-Year and 10-Year BEI. They reflect what the bond market thinks. 

Money Maker: Inflation expectations are emotional. They’re shaped by: 

· News headlines 

· Gas prices 

· Central bank signals 

· Wage increases 

Read More……………….DO NOT TRADE GOLD: Until You Understand the Game